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Title: Low cost carrier-airport relationship development in Southeast Asia
Authors: Lin, Cheuk-ki Eliver
Degree: Ph.D.
Issue Date: 2010
Abstract: This research aims to construct a theory based upon the explanation as to why and how low cost carriers (LCCs) and airports establish, as well as develop, business relationships in the context of Southeast Asia. The research study examines the pre-requisite constraints that may be encountered, factors that may drive the establishment of business relationships and factors that may affect both the establishment and development of business relationships. This is an exploratory study to examine the development process of business relationships between LCCs and airports by investigating interaction episodes between them. A qualitative approach is adopted to investigate stages of the development process. The multiple case studies approach is also applied to several LCC-airport relationships to compare and contrast interaction episodes between them. The unit of analysis is defined as the development process of a dyadic relationship between the LCC and airport. Four case studies, Cebu Pacific-Suvarnabhumi Bangkok Airport, Cebu Pacific-Hong Kong International Airport, AirAsia-Macau International Airport and AirAsia-Clark International Airport, are selected. These will represent the four extreme scenarios of configuration of power imbalance and mutual dependence (Casciaro & Piskorski, 2005). This is in order to manifest influences of power and dependence on interaction by explicitly showing contrasts between the four extreme scenarios. As well as secondary data, two sets of semi-structural interview guides have been designed to collect primary data from both LCCs and airports. Three stages have been found in the LCC-airport relationship development process, these being the pre-relationship stage, relationship establishment and growth stages and relationship outcomes. Within the pre-relationship stage, the freedom of LCCs and airports to establish a mutual business relationship is found to be limited by pre-requisite constraints which also frame the whole development process of their relationships. This research introduces a business opportunity matrix to evaluate the desire of LCCs and airports to establish a business relationship with each other. Some external factors are found to form modulating forces which can weaken or re-enforce the desire of LCCs and airports in establishing their business relationships. The inter-desire of both LCCs and airports must be taken into account simultaneously when examining the possibility of establishing a business relationship between them. The inter-desire of LCCs and airports is found to determine their state of power imbalance and mutual dependence. Hence, their interaction during relationship establishment and growth stages is influenced. Power imbalance is found to determine equality in exchanging compromise and support between LCCs and airports. Mutual dependence and intertwined well-being and interests make LCCs and airports more willing to compromise and provide support to each other; while mutual dependence and mutuality are found to determine the strength of LCC-airport relationships. This research also reveals two different approaches to relationship development between LCCs-flexible airports and LCCs-institutionalized airports. The institutionalized airports carry inherent power which is found to over-ride the power imbalance-mutual dependence status and dictate the behavior of LCCs. Government attitude, local carriers, media and ground parties are also found to influence interaction between LCCs and airports. Finally, four types of LCC-airport relationship outcomes are identified. They are the solid strategic-reciprocal relationship, unilateral committed relationship, loose-institutionalized relationship and unilateral attached-institutionalized relationship. Current relationship outcomes are found to determine attitudes towards future relationship development. Provided their state of power-dependence and mutuality remain unchanged, future interaction and relationship outcomes can be affected.
The significance of this study reflects on the implications for practitioners and its contribution to academia. This research suggests the business opportunity matrix as a method for LCCs and airports to evaluate the value of establishing a business relationship with potential business partners. The findings of relationship establishment approaches, most wanted resources and capabilities together with the evaluation of power-imbalance, mutual dependence and mutuality provide ground for LCCs and airports to establish strategies for negotiating with each other. Strategies have also been suggested for LCCs and airports, based upon different relationship outcomes. For the academia, this research is able to extend the theories of interaction (Ford et al., 1986; IMP Group, 1982), resource dependence theory (Pfeffer & Salancik, 2003), mutuality (Ford et al., 1986) and capability (Ford et al., 1986) from the areas of industrial buyer-seller relationships to the LCC-airport relationships. These theories and concepts, together with the newly introduced business opportunities matrix and the configuration of inter-desire, enrich the theories within aviation management. Additionally, this research study also introduces a new concept within the resources and capabilities of airports. Airports are found to have the ability to control the accessibility of LCCs to potential demand of the catchment area of airports. The author also believes that FSCs will become increasingly cost conscious. Therefore, their interaction with airports in the future may follow similar interaction between LCCs and airports. This study can act as a starting point in studying the evolving FSCs-airport relationships.
Subjects: Hong Kong Polytechnic University -- Dissertations
Airlines -- Management -- Southeast Asia
Aeronautics, Commercial -- Management -- Southeast Asia
Airports -- Southeast Asia
Pages: x, 415 p. : ill. ; 30 cm.
Appears in Collections:Thesis

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