Flag carriers: Should we preserve them?

• Main Author: Timár, Anett Emese
• Publication Date: 2013
• Format: Master thesis
• Language: eng
• Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Download full: http://hdl.handle.net/10071/8577
• topic: Companhia aérea -- Airline; Flag carrier; Hungary; Low cost carrier; Network carrier; Companhias aéreas; Low cost; Companhias de rede; Companhias de bandeira; Húngria

This pedagogical case study is dedicated to show the recent changes in the airline industry, whereby the majority of the so-called ‘flag carriers’ disappeared, either through privatization or bankruptcy. This is due to lack of capacity to adapt to a new environment, by which network carriers and low cost carriers are fighting with continuous cost reduction and business model changes in order to attract more passengers. Recent studies show that the model of low cost carriers is more suitable in the short haul markets, through which carriers can focus on point-topoint execution rather than network fares. Therefore, network carriers are being forced to reevaluate their way of service with a result of a new model adapted from the low cost carriers. The case study will present the incident of Malév, the Hungarian flag carrier, focusing on the steps that lead to bankruptcy, and analysis of the competitors’ strategic movements occurred right after its official stop of operations on February 3rd, 2012.