The dynamics of business contexts influence the way firms act in their industry. These changes can have effects in several areas within a company. Entrepreneurship and Innovation are two areas that are affected when a change in firm’s environment occurs, like Schumpeter, Shane and Drucker point. Changes in the deregulatory framework are a specific type of change that can occur. According to Entrepreneurship theories, the removal of regulatory barriers creates opportunities to different reallocation of resources that can lead to changes in market equilibrium. This study addresses this relation between deregulation and entrepreneurship-innovation in the European airline industry. With the removal of regulatory barriers, companies like SAS and Ryanair, saw opportunities to do something new and at the same time had to adapt to these “doing something new” behavior of other companies. Entrepreneurship and innovation were the answer to theses changes and the weapon to fight answers to others with this change. Considering this, our statement problem is the following: How did the deregulation of air transportation in Europe foster entrepreneurial behavior and innovation in the European airline industry over the last twenty years? The case of SAS and Ryanair. Our goal is to describe the process of deregulation and how firms reacted to it and to give explanations behind the relation deregulation-entrepreneurship, identifying the direct and indirect influence of deregulation in the studied companies. Furthermore, based on this investigation, we will trace possible ways on how future deregulation in Europe can foster further entrepreneurial behavior and innovation. This thesis was conducted with a positivism scientific ideal and a deductive approach. We used a qualitative method to collect empirical data that could match with the theories we had chosen beforehand. We conducted three interviews with people inside the industry – from airlines (SAS Braathens and SAS) and from airports (LFV). The first two were used as main sources to SAS case study and the third to have a perspective of airline industry. Since we could not get any interview with Ryanair, Ryanair story book was used as main source for this case study. Our theoretical framework consists of four different broad areas that are interrelated to each other. These areas and the respective theories integrated in them are: institutions and regulation, changes in context and strategic position. Our study shows that EU deregulation altered the five competitive forces in European airline industry and in turn this fostered entrepreneurship and innovation, as a reaction of firms to adapt to the change in their context. The reaction of Ryanair and SAS through entrepreneurial and innovative behaviour was different due to the differences in their business model. We argue that the removal of barriers to new entrants and the increased rivalry between firms were the main forces that fostered entrepreneurship and innovation. We predict that if further EU deregulation comes (as it is the trend) this will generate more opportunities to entrepreneurship and innovation like it generated in the past.

Crew costs are one of the largest expenses for airlines and effective manpower planning is therefore important to maximize profit. The focus of research in the field of manpower planning for airlines has mainly been on the scheduling of crew, while other areas, surprisingly, have received very little attention. This thesis provides an overview of some of the other problems facing manpower planners, such as designing a career ladder, planning transitions and making course schedules. Mathematical models are presented for some of theses problems, and for the problem of allocating training and vacation in time the mathematical model has been tested on data from SAS Scandinavian Airlines. When allocating training and vacation there are many aspects to consider, such as avoiding crew shortage, access to resources needed for training, and vacation laws. Comparisons between solutions obtained with the model and SAS Scandinavian Airlines manual plan show encouraging results with savings around 10%.

Frågeställning: Hur skiljer sig lågprisflygbolagens strategier jämfört med de traditionella, vilken är den vinnande strategin? Huvudsyfte: Genom utvalda teorier och nyckeltal jämföra och se skillnader mellan flygbolagens strategier och hur det påverkar lönsamhet och utveckling. Metoder: En jämförande studie baserad på sekundärdata på fem stora flygbolag för att hitta olikheter i strategier. Främst används bolagens årsredovisningar, vetenskapliga artiklar och relevanta teorier för insamlandet av data. Slutsatser: Biljettpriset inom flygindustrin blir en allt viktigare faktor att anpassa sig efter för överlevnad på marknaden. Lågprisflygen har genom kostnadsreduceringar genom enklare bokningssystem, mindre personalstyrka, avlägsna flygplatser och enhetlig flotta kunnat sätta lägre priser än de traditionella. Detta innebär att effektiviteten har ökat och detta sätter press på de traditionella flygbolagen att kostnadsreducera och utveckla servicen ytterligare för att ha en chans att klara konkurrensen. Marginalerna har blivit mindre vilket pressar ner lönsamheten inom industrin. Traditionella flygbolag behöver anpassa sig efter de nya kraven och omstruktureringar är nödvändigt. / Problem formulation:  How does the low price airlines strategies differ from the traditional airlines strategy, which is the winning strategy? Main purpose: With chosen theories and key figures see the differences between airlines strategy and how it affects profitability and development. Method: A comparing study based on secondary data from five big airlines in order to find differences in strategy. Mostly the companies' annual reports, scientific articles and relevant theories are used for the collection of data. Conclusions: It is becoming more important to adjust the ticket price on air travelling to survive on the aviation-market. Low-price airlines have been able to lower the ticket price through cost reductions with easier booking systems, smaller workforce, less attractive airports and a uniform fleet. This productivity increase is forcing the traditional airlines to reduce their costs and improve their service to deal with the competition. The marginal's are getting smaller and profitability is getting lower. Traditional airlines have to adjust after the new demands and restructures are needed.

Aim The commercial success of some low cost airlines presents the low cost model as very attractive. Until now their main focus has been on short-haul routes, but it is no surprise that they show an interest in entering the long-haul routes market as recent trends are very promising. The aim of this study is to analyze whether the low cost business model is applicable for long-haul routes, which parts of the model are transferable to long-haul services, what competitors responses might be and whether there is potential for low cost airlines operating in Scandinavia to gain frequent, well paying and demanding business travelers on their future long-haul routes. Method In this study a survey method with structured questionnaire distributed by e-mail has been used to collect the primary data. The main source of secondary data has been airline industry literature, newspapers, magazines and data provided by aviation statistical organizations. The empirical part of this study is conducted as a quantitative and qualitative study. Intention of empirical part is to find detailed information and describe business travelers’ behavior, corporate travel policies, business trips pattern and attitude towards low cost airlines. Conclusions The cost savings that low cost airlines achieved in the short-haul market will be much more difficult to achieve to long-haul services. In terms of areas where airlines can achieve cost leadership labor costs is certainly the best area to attack. To be successful, low cost airlines would have to adopt some elements of the traditional business model. But the success of long-haul low cost airlines will not only depend on achieving cost advantages. Availability of leisure time for long-haul trips and response of competitors will be other factors. Suggestions for future research A deeper analysis of low cost long-haul airlines potential could be possible with survey among leisure travelers and VFR (visiting friends and relatives) segment. Contribution of the Study This study has arrived at the conclusion that in order to be successful on long-haul routes low cost airlines would have to keep most of the features of traditional airlines. Low cost long-haul airlines would most probably be successful in pure leisure routes, ethnic markets, during peak season and on dense point to point destinations.

Robust Airline Fleet Assignment Barry C. Smith 140 Pages Directed by Dr. Ellis L. Johnson Fleet assignment models are used by many airlines to assign aircraft to flights in a schedule to maximize profit. Major airlines report that the use of fleet assignment models increases annual profits by more than $100 million. The results of fleet assignment models affect subsequent planning, marketing and operational processes within the airline. Anticipating these processes and developing solutions favorable to them can further increase the benefits of fleet assignment models. We propose to produce fleet assignment solutions that increase planning flexibility and reduce cost by imposing station purity, limiting the number of fleet types allowed to serve each airport in the schedule. We demonstrate that imposing station purity on the fleet assignment model can limit aircraft dispersion in the network and make solutions more robust relative to crew planning, maintenance planning and operations. Because station purity can significantly degrade computational efficiency, we develop a solution approach, Station Decomposition, which takes advantage of airline network structure. Station Decomposition uses a column generation approach to solving the fleet assignment problem; we further improve the performance of Station Decomposition by developing a primal-dual method that increases the solution quality and model efficiency. Station Decomposition solutions can be highly fractional; we develop a fix and price heuristic to efficiently find integer solutions to the fleet assignment problem. Airline profitability can be increased if fleet assignment models anticipate the effects of marketing processes such as revenue management. We develop an approach, ODFAM, which incorporates airline revenue management effects into the fleet assignment model. We develop an approach to incorporate station purity and ODFAM using a combination of column and cut generation. This approach can increase airline profit up to $27 million per year.

This dissertation analyzes pricing under uncertainty focusing on the U.S. airline industry. It sets to test theories of price dispersion driven by uncertainty in the demand by taking advantage of very detailed information about the dynamics of airline prices and inventory levels as the flight date approaches. Such detailed information about inventories at a ticket level to analyze airline pricing has been used previously by the author to show the importance of capacity constraints in airline pricing. This dissertation proposes and implements many new ideas to analyze airline pricing. Among the most important are: (1) It uses information about inventories at a ticket level. (2) It is the first to note that fare changes can be explained by adding dummy variables representing ticket characteristics. Therefore, the load factor at a ticket level will lose its explanatory power on fares if all ticket characteristics are included in a pricing equation. (3) It is the first to propose and implement a measure of Expected Load Factor as a tool to identify which flights are peak and which ones are not. (4) It introduces a novel idea of comparing actual sales with average sales at various points prior departure. Using these deviations of actual sales from sales under average conditions, it presents is the first study to show empirical evidence of peak load pricing in airlines. (5) It controls for potential endogeneity of sales using dynamic panels. The first essay tests the empirical importance of theories that explain price dispersion under costly capacity and demand uncertainty. The essay calculates a measure of an Expected Load Factor, that is used to calibrate the distribution of demand uncertainty and to identify which flights are peak and which ones are off-peak. It shows that different prices can be explained by the different selling probabilities. The second essay is the first study to provide formal evidence of stochastic peak-load pricing in airlines. It shows that airlines learn about the demand and respond to early sales setting higher prices when expected demand is high and more likely to exceed capacity.

The megaregion spatial form has grown in prominence in recent years in planning thought, but the relationship between megaregions and the aviation sector is rather untouched in research. The purpose of this study is to examine the role airports play as transportation hubs for megaregions, and how the megaregions are connected through air traffic. Comparing the megaregions involved an empirical study using attribute data about the megaregions and the flows between them. The infrastructure in the megaregions was compared by density and type of airports, including an examination into airline hubs. The connectivity between megaregions, non-megaregion areas, and the international market was analyzed employing T-100 data, separating the analysis for the passenger and freight sectors. The top flows in the country were examined, along with the relationships each megaregion has individually, and particularly their internal flows. Megaregions are much more active in air travel than non-megaregion areas due to a larger presence of airline hubs and greater infrastructure. The international component of the passenger and freight sectors is growing the fastest in relation to megaregions, but only for the freight sector is this the largest component. The largest component of the passenger sector is the flows between megaregions. Flows within megaregions for the passenger sector are growing slowly and are declining in the freight sector, but short-haul air traffic continues to be the cause of congestion. The megaregion is a suitable level to manage infrastructure investment to better prepare the regions for the coming growth. A megaregion-level institution is best suited to managing the issues which must be faced by the numerous jurisdictions.

A column generation based approach is proposed to solve scheduling problems for fractional airlines efficiently and return near optimal schedules. Crew tours are building blocks of our approach, and our approach is focused on exploring more feasible tours than other approaches. In particular, all elements of a crew tour are optimized during the preparation and tour generation procedures. Moreover, time windows of customer-requested flights are handled exactly, and generalized to time window and crew time window of duties and tours. Furthermore, time windows of tours are contained in the MIP formulation to ensure more feasible connections between tours. In the pricing subproblem, an efficient constrained shortest path algorithm is proposed, which is necessary for our model and also provides extensibility for incorporating more complex constraints in the future. Computational results of our model show very small optimality gaps and consistent improvements over the model used in practice. Moreover, restricted versions of our model that have fast running time are provided, thus very desired in the case that running time has more priority than solution quality. In order to understand the demand, data mining of demand data is presented and analyzed. Moreover, a recovery model is proposed to deal with unscheduled maintenance in practice, by reserving airplanes and crews in the model. Computational experiments show the advantage of the recovery model, in the case of simulated unscheduled maintenance and comparing to models without recovery considerations.

<p> </p><p>Crew costs are one of the largest expenses for airlines and effective manpower planning is therefore important to maximize profit. The focus of research in the field of manpower planning for airlines has mainly been on the scheduling of crew, while other areas, surprisingly, have received very little attention. This thesis provides an overview of some of the other problems facing manpower planners, such as designing a career ladder, planning transitions and making course schedules.</p><p>Mathematical models are presented for some of theses problems, and for the problem of allocating training and vacation in time the mathematical model has been tested on data from SAS Scandinavian Airlines. When allocating training and vacation there are many aspects to consider, such as avoiding crew shortage, access to resources needed for training, and vacation laws. Comparisons between solutions obtained with the model and SAS Scandinavian Airlines manual plan show encouraging results with savings around 10%.</p><p> </p>

<p>Background: The airline industry is unique and fascinating. It was protected through government controls until the early 1980s. However, due to deregulation policy the industry opened to free competition. As a result, collaborations and alliances were formed and low budget airlines were able to enter the market. </p><p>Purpose: The purpose of this thesis is to present the current stage of the European airline industry by investigating the strategies of Ryanair and SAS with the help of strategic management tools. </p><p>Procedure: Two companies were chosen, Ryanair as a low budget airline and SAS as a mature airline. The investigation was based on secondary data found in financial -, annual -, business - and company reports as well as in independent analyst reports and on the Internet. </p><p>Results: Ryanair’s and SAS’ strategies differ a lot. While Ryanair is focusing on lowest costs it is able to offer low fare tickets but also puts effort into increasing service. On the other hand, SAS’ complicated situation in the weak industry leads to many strategic adjustments. Its diverse choice of prices and services underlines its current instability. Concerning the European airline industry, moves toward consolidation are observable. The industry is reshaped</p>