Abstract
The growth of the aviation industry has seen a rapid increase in low-cost carriers (LCCs) commencing operations, threatening the sustainability of a number of legacy airlines. The response to this challenge and threat has been for legacy airlines to create an airline-within-airline (AWA). This study reviews prior literature regarding the hotel industry and multi-brand strategy, and also uses case studies to examine the evolution of the AWA strategy at the Singapore Airlines Group and the Qantas Group between 2000 and 2016 in order to identify why these airlines operate AWAs successfully. High levels of autonomy, clear strategies, complimentary route networks, appropriate resources and minimal cannibalisation are identified as the primary attributes required for a successful AWA operation. Legacy airlines whose AWA strategy failed in the past often did not operate with all these essential attributes, which resulted in their AWAs undermining and competing directly with their own operations.
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