A portfolio management approach to strategic airline planning

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Practitioners and theorists usually blame regulatory restrictions and recession for the huge losses throughout the airline industry. The principal reason seems to lie in the fact that they tend to analyze air services at a macro-level. The present work appears to run against the tide of contemporary publishing. But, in viewing the problem at a different scale gives insight into what aviation leaders see as being the key components of the firm's success and profitability since the micro-organization structure is challenged more often, and its processes are continually made less effective by unforeseen events. Based on extensive field work and academic underpinnings, the study provides some clues to the belief that deficiencies in overall management capabilities contribute to the sad state of affairs. It is this most important, but almost totally neglected aspect of the airline business to which this publication hopefully will make a contribution. Successful sample organizations have implored their people to build product-markets and lead rather than follow competitors. Portfolio management is argued to create the necessary context for stimulating innovation and help solve the industry's most critical problem - its inability to match supply with demand.