Growth and internationalisation strategies in the airline industry

This paper analyses the international growth of the global air transport sector to identify factors that determine the emergence of transnational companies and different forms of international expansion in the airline industry. An analysis of the market structure is conducted to understand why traditional, full service airlines have adopted alliances and code sharing to internationalise their business, while low-cost carriers prefer more direct methods to enter new foreign markets.

Research highlights►The paper examines the factors that are leading to the increased internationalisation of airlines. ►The study applies Porter’s five forces framework to demonstrate the various factors leading to different approaches to the internationalisation of approaches of low cost and traditional airlines. ►An explanation of why there has, until recently, been very little foreign direct investment in the international airline sector is developed.