Outsourcing for competitive advantage: An examination of seven legacy airlines

Although airlines are increasingly outsourcing to achieve competitiveness in ever more challenging business environments, this practice is not always successful and its theoretical justification has not been fully explored. The paper compares the extent to which a number of key resources and functions in a sample of major, legacy airlines have actually been outsourced with a theoretical appraisal based on the transaction cost economics framework. The findings show that the degree of outsourcing of these activities is not always what theory would predict to be advantageous.