Strategies of Major Carriers Away from their Main Hub Airports: A Comparison of the European and US Experience

As the business plans of European and US legacy carriers mature and adapt to deregulation, open skies and competition from LCCs, new strategies have developed to feed hubs and operate the route system in efficient and more cost effective ways. These strategies appear to differ based on the airline’s business plan, hub location, economy, political influence, level of competition and operating environment. In particular, a wide range of different approaches are apparent to dealing with non-hub services - as this is where the airline's competitive position is weaker. These include use of regional affiliates, low-cost subsidiaries, outsourcing and swaps of slots and assets. Mainline branding may be adopted or a stand-alone brand developed. The role of marketing tools such as frequent flyer programs (FFPs), code-shares and alliances provides an important differentiator from the pure low-cost segment of the market. This paper critically evaluates these operating solutions for selected legacy carriers and network locations in both the EU and US. The strategies will be assessed within the context of each country's airline environment. Conclusions are drawn about which approaches are more or less effective given the business objectives of the carriers chosen for analysis.