Airline route development: developing airlinks to benefit all stakeholders
Creators: name: Yarde, Kareem
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 401003
subject: Engineering practice

description: The concept of route development was first associated with the airline’s typical networking and scheduling activities. The term then evolved to represent a process of engagement between the airline and the airport to influence airline route decision-making. However, the attempt to exert influence has increasingly gravitated away from focusing on airports, towards the involvement of other destination stakeholders. Destination-led stakeholder attempts to influence airline route decisions have, therefore, been emerging as an area of academic focus. This study aims to establish novel insights into destination stakeholders’ use of available resources to generate power that influences airline route decisions. The research investigates how these sources of destination power affect collaboration and the joint pursuit of value in airline-destination relationships.

It addresses key questions to guide interactions between airlines and destination stakeholders. Key questions addressed include: (1) What information is used to prioritise route decisions in the airline route planning process? (2) Who are the destination stakeholders, and what are their associated tactics, strategies and interests for influencing airline route decisions? (3) How does destination stakeholder power influence success factors for collaboration in airline-destination route development relationships? (4) How do success factors for collaboration affect value creation in airline-destination route development relationships? (5) To what extent do perspectives of the effective implementation of success factors for collaboration in airline-destination route development relationships differ across airline and destination stakeholders? 

In addressing these questions, this thesis relies on the following theoretical frameworks: stakeholder theory and resource-based power, collaborative value creation and process factors for successful collaborative relationships. It adopts a sequential research design involving insights from a systematic literature review, in-depth interviews, a survey, and secondary data. Both the primary and secondary data were globally selected. Interviews and survey respondents include a global selection of airline network managers, airport managers, government officials, tourism authorities, and travel trade representatives. Secondary data is based on air service development initiatives from a global selection of airports. The data collection and analysis process was separated into two phases. In Phase 1, a systematic literature review was conducted, which revealed over 450 sources of information which inform airline route decisions. These information sources were derived from over 114 articles. They were grouped into themes using content analysis and reduced to 24 distinct themes. 

Secondary data analysis was also conducted in Phase 1 using a platform used by route development specialists to communicate route opportunities and route development proposals. The secondary data highlighted destination-based tactics and collaborations when pursuing air services, including “market research and intelligence”, “collaboration and relationship building”, and “administrative support and regulatory compliance guidance”. It also outlined critical destination organisations involved in route development, including airports, government agencies, tourism authorities, and travel trade businesses. Data from Phase 1 was validated in Phase 2. 

Phase 2 of the study involved 32 in-depth interviews and the survey, which received 83 responses. Phase 2 of the study was followed by Phase 3, which used the data from phases 1 and 2 to formulate survey scales. The survey scales in Phase 3 validate the findings of phases 1 and 2. This study identifies key interests and related stakeholders involved in route development. Overall, the findings examine how destination stakeholders generate power in route development from various resource exchanges with airlines regarding the transfer of information and activities. Key findings include determinants of value in airline-destination route development relationships such as reputation and brand affiliation, and market reach; market intelligence and various forms of support; relationship building, equity and fairness, active involvement, and stakeholder co-dependence. 

A key implication of this research overall relates to air service development as a collaborative process of tactical intra-destination engagements that reduces the power imbalance in the airline-destination relationship. The implications for the industry are that it allows destination stakeholders to coalesce their diverse and complementary resources to convince the airline to prioritise the route over other competing route entry options. Ultimately, and most importantly, the study reduces inefficiencies in route entries, thereby limiting resource wastage for both airlines and destinations. Doing so maximises the social welfare gains that come from optimising air access, as discussed in Chapter 2.

The findings indicate that destination stakeholders can exert power in route development by coalescing destination stakeholder resources. Importantly, it also has implications for instrumental approaches to stakeholder theory as it proposes that integrating collaborative value creation into instrumental stakeholder theory (IST) addresses concerns raised by critics. Based on the findings, the study encourages an amendment to the Austin &amp; Seitanidi (2012a) value creation spectrum. In their dyadic analysis, the authors argue that value is a sequential evolutionary development gravitating from association to synergistic value as the collaboration evolves from the isolated independent actions of partners to their conjoined efforts. 

Instead, the model could make a more substantive impact that addresses gaps in stakeholder theory and value creation by integrating major and peripheral stakeholders according to the model by  Su et al. (2007) and the influence these entities have on the major stakeholder’s ability to exert power within the stakeholder interaction. This approach contrasts with the current linear dyadic relationships usually applied to aviation. Limitations of the research include lacklustre participation from respondents, even though the response rate is consistent with other studies into route development. Another limitation is that the systematic literature review only included peer-reviewed articles published in English.