THE ROLE OF INNOVATION IN THE INCREASINGLY COMMODITIZED AIRLINE INDUSTRY – INSIGHTS FROM CASE STUDIES

摘要

Problem: There are many industries with commoditization tendencies, where price is the key buying criteria and little differentiation between the services on offer exists. The purpose of this paper is to analyze innovation in the increasingly commoditized airline industry and to derive a concept to successfully position an airline in such a market environment. We focus on the passenger airline industry as an important service industry. Furthermore, little research exists on innovation in the airline industry. The main research question is how airlines leverage innovation under such market conditions. Approach: This qualitative study utilizes a multiple case study approach. We first bring forward a definition of innovation in an airline industry context to lay the foundation for the study of innovation approaches of different airlines. Further we evaluate the state of commoditization in the airline industry based on a general framework we developed for service industries. The empirical basis consists of a sample of 30 airlines pursuing traditional (full service network carriers) and non-traditional business models (e.g. LCCs). Within this sample, eight airlines were part of in-depth case studies. Besides the analysis of a variety of data sources (data triangulation), we conducted at least two indepth interviews with senior airline executives at each of these airlines. Findings: In this paper, we focus on the innovation areas, the perceived importance of innovation and on organizational setups for innovation. We detect different patterns of innovations and draw conclusions that are relevant for other service industries as well. We also develop a framework that shows innovation priorities for different business models in commoditized service industries. Finally, we propose four levers to expand the core service offering and to successfully position an airline in a commoditized market environment. Conclusions: Across the board, airline managers regard innovation as a highly important area especially in light of an increasingly commoditizing industry. However, the reasons and focus areas for innovation differ. Depending on the business model and competitive situation of the airline we observe different innovation areas. While large network carriers and LCCs put the biggest emphasis on operational innovations, smaller and more focused airlines focus more on product and service innovations. We also discover different approaches to organize innovation as the organizational setups and responsibilities for innovation diverge widely. Few carriers possess clear responsibilities or established innovation processes. We conclude that in an increasingly commoditizing service industry a clear strategic positioning is required and show four levers to innovate the commoditized core offering in order to compete effectively.