INNOVATION IN THE AIRLINE INDUSTRY: A

GLOBAL ANALYSIS
Innovation is a prerequisite for globally competitiveness III airlines. The study aimed at
investigating the innovation practices adopted by airlines around the world, the trends they
follow, the importance of innovation to business and its impact on the performance of the
business. To achieve this, research objectives were formulated to determine innovation trends
adopted by these airlines.
The study adopted an exploratory approach and used secondary data. The study sampled 33
airlines from around the globe. Data was collected using secondary datal data mining from
websites using observation check. The data collected was analyzed using the Statistical Package
for Social Sciences (SPSS) software version 18.0. Chi-square analysis and regression analysis
was used in the analysis.
The findings showed that innovations indicators studied included brand restructuring, product
diversification, new market penetration, incremental innovation, consolidation, commoditization,
disruptive innovation, globalization, product or service concept, communication concept,
revenue concepts, organizational form and cooperation concept. The indicators that showed
significant association with the geographical location of the airline included incremental
innovation, disruptive innovation, globalization and revenue concepts. The indicators that
showed significant association with the ownership of the airline were disruptive innovation and
revenue concepts. The indicators that showed significant association with the age of the airline
were incremental innovation and product or service concept.
China United Airlines and Qantas were reported as the most innovative airlines with both scoring
94% as per the innovation indicators while Cubana de Aviaci6n and Caribbean Airlines were the
worst performing in terms of innovation. Delta Air Lines made the highest profit of USD 1, 009
million in the financial year 2011-12. Malaysia Airlines made the highest loss of USD 767.2
million during the same financial period.