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Air Baltic and SAS ‐ a case study in the European airline industry

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Purpose ‐ No-frills carriers have revolutionized Europe's aviation market and have changed the airline business in a dramatic way. Having entered most of the countries in Central Europe, the wave has also reached the Baltics. The purpose of this paper is to reveal how a Scandinavian carrier entered the market with a subsidiary airline, by combining elements of low-cost and traditional carriers. Design/methodology/approach ‐ The paper starts by giving a brief overview of the different airline operating philosophies. It is followed by an introduction into the Nordic airline market. The main focus will be on the operating strategy of Air Baltic and its relation towards the extension policy of Scandinavian Airlines. Findings ‐ The paper provides an independent and structured analysis about the strategy of Air Baltic. Theory was applied to determine how much the airline was influenced by the "low-fare wave" of the aviation branch and its implications. The hybrid character of Air Baltic reflects the Central European/Baltic business environment. Research limitations/implications ‐ Research is partly limited to the information published by the airline itself. Because international aviation journals have not yet covered Air Baltic, newspapers and popular journals were used as a base of information. To fill this gap, two semi-structured interviews with Air Baltic executives were carried out. Practical implications ‐ The study is a useful source of information for scientists and managers dealing with the airline industry or/and the Baltic Sea region. Lecturers might use the paper for case-based courses. Originality/value ‐ This paper is one of the first comprehensive publications in the English language about Air Baltic and the Baltic aviation market.
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Keywords: Airlines; Baltic States; Competitive strategy; Market entry

Document Type: Research Article

Publication date: 2006-05-01

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