COVID-19: Ways and Drivers of Value Proposition Transformation of Russian Airlines

Abstract

The passenger air transportation industry is one of the most affected as a result of anti-coronavirus restrictions, and its post-crisis recovery will take place in the context of changes in consumer behavior and, consequently, the configuration of the value proposition. Similar transformations of the value proposition have already been observed in the past. Therefore, an analysis of the current situation is impossible without considering the evolution of the value proposition of airlines over the past 30-40 years. We determined directions of post-COVID-19 value proposition development, based on systematic literature review. The empirical study of domestic passenger air transportation market consisted of two stages. At the first stage, we determined directions of the post-crisis airline value proposition development using case study method. At the second stage, we conducted a survey of 808 passengers on domestic routes to identify their perception of value propositions changes and its significance for airline-choosing process. Empirical results demonstrated airlines transition to expand the list of available services available for passengers. It allows them to attract new groups of passengers and increase their loyalty. From the passenger's perspective, such extension, on the one hand, differentiates carriers and, on the other hand, complicates consumer choice.