Abstracts Business

Towards a sustainable airline business model : addressing the forces impacting on European based airlines

by Christopher Allen Wills

Since the year 2000 the existing business model of many European airlines has come under extreme financial pressure from a weak and volatile economy, the threat of international conflict, terrorism and pandemics, as well as a high dependence on the supply and price of fossil fuels. Oil based transport is becoming a major sustainability issue due to price and supply fluctuations, geopolitics, and burgeoning environmental concerns. This thesis examines the role of business model innovation in supporting a sustainability transition in the European airline sector. To achieve this aim, I develop a novel framework that links the Multi-Level Perspective (MLP), the STOF model and business model innovation to understand the drivers affecting the European airline industry. I adopt a four-stage mixed-method approach consisting of a quantitative study of published European airline results, a grey literature review, forty structured interviews and a final triangulation. The findings pinpoint the failings of the industry and detail the major issues concerning its sustainability transition to a low carbon industry. A fragmentation towards four business model groups is identified. The results of the research indicate that changes to airline business models are reactions to forces arising from the MLP and do not lead industry transition. The study indicates that a long incremental sustainability transition in an internationally regulated industry using evolving complex technologies is difficult to capture by reworking airline business models, but that the adoption of new technology can advance system transition. The separation of these technologies into operating ´parcels´ could offer a valuable understanding of their contribution to the business model construct. A sequenced framework for industry transition is proposed. The thesis contributes to the limited literature on the role of business model innovation in shaping sustainability transitions and highlights critical issues and challenges facing the airline sector in Europe.