The Impact of Strategic Airlines Alliances on Brand Management
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The Impact of Strategic Airlines Alliances on Brand Management Practices: The Case of Royal Jordanian Airlines in Oneworld Alliance Dana Fawzi Kakeesh PhD University of York Management February 2016 To my beloved father, Fawzi, and my grandmother, Nora, who passed away just before witnessing this moment. 2 Abstract The trend over several decades towards the creation of global brand alliances in the highly competitive airline industry is likely to persist. However, few academic studies consider how such horizontal brand alliances have been achieved and even fewer analyse their creation and maintenance from an individual company’s perspective. Furthermore, current studies are largely derived from a western management perspective: little work has been done in the Arab world or the Arabian airlines apart from recent studies of Gulf carriers. This thesis adds to this small body of work by examining Royal Jordanian Airlines’ role within the Oneworld Alliance. In particular, it analyses how the entry of a small airline into a large, well-established global organization affected the airline’s branding practices. The thesis also explores in lesser detail the branding and marketing strategies within the global alliances. A qualitative approach was used; purposive and snowball-sampling techniques were adopted to analyse 61 semi-structured interviews with senior managers and other actors within the airline industry. Two main themes have emerged: the first theme, the Airlines Industry’s Attitude towards Brand Alliances, examines the major challenges in the airlines industry, demonstrates the main motivations behind forming strategic airline alliances and explores the relationship between globalisation and the initiatives to formulate more strategic airline alliances. The second theme, the key branding and marketing strategies, investigates the alliances’ brand practices and marketing strategies and explains how a small national airline company has responded to this trend and offers a set of potential choices for future. Also this study provides compelling evidences of how the Oneworld Alliance creates branding value for the small airlines member and contributes toward understanding the case of the Arab world and the interplay between global alliance brands and national airlines companies. Finally, it demonstrates a number of issues that the alliance members need to address in order to avoid any brand dilution or negative spillover effect. 3 List of Contents Abstract 3 List of Contents 4 List of Tables 9 List of Figures 10 Acknowledgments 12 Author’s Declaration 14 Chapter One 16 Introduction and Scope of the Study 16 1.1 Background ........................................................................................................... 16 1.2 Scope of Research ............................................................................................... 20 1.3 Significance of the Problem ............................................................................. 23 1.4 Research Aim and Objectives ......................................................................... 25 1.5 Research Questions ............................................................................................ 26 1.6 Thesis Structure .................................................................................................. 26 1.7 Chapter Summary ............................................................................................... 28 Chapter Two 30 The Case of Royal Jordanian Airlines 30 2.1 Introduction .......................................................................................................... 30 2.2 The Hashemite Kingdom of Jordan and the Region ................................ 30 2.2.1 Tourism in Jordan .......................................................................................................... 34 2.3 The Civil Aviation Sector in Jordan ............................................................... 39 2.3.1 Airline Companies in Jordan ...................................................................................... 39 2.3.2 Air Services Agreements ............................................................................................. 42 2.4 The Case Study Profile ...................................................................................... 44 2.4.1 Background....................................................................................................................... 44 2.4.2 The Status Quo of Royal Jordanian Airlines ......................................................... 47 2.4.3 The Service Components of Royal Jordanian Airlines ..................................... 54 2.5 Oneworld Alliance .............................................................................................. 55 2.6 Conclusion ............................................................................................................. 64 4 Chapter Three 65 Brand Alliances in Airlines Industry Framework 65 3.1 Introduction .......................................................................................................... 65 3.2 Theme One: The Context of the Airlines Industry ................................... 65 3.2.1 Understanding Globalisation ..................................................................................... 66 3.2.2 Globalisation within the Airline Industry ............................................................. 67 3.2.3 Macro-Level Drivers Affecting the Airline Industry ......................................... 68 3.2.4 Definition of Strategic Alliances ............................................................................... 72 3.2.5 The Model of Strategic Alliances .............................................................................. 73 3.2.6 The History of Airline Alliances ................................................................................ 76 3.2.7 Driving Forces behind Airline Alliances' ............................................................... 78 3.2.8 Types of Strategic Airline Alliances ......................................................................... 83 3.3 Theme Two: Branding and Marketing Strategies .................................... 86 3.2.1 Brand Definition ............................................................................................................. 88 3.3.2 Services Branding .......................................................................................................... 89 3.3.3 Brand Alliances ............................................................................................................... 92 3.3.4 Brand Management .................................................................................................... 101 3.3.5 The Potential Future Impact on Allied Brands ................................................ 106 3.4 Chapter Summary ............................................................................................. 108 Chapter Four 112 Research Design and Methodology 112 4.1 Introduction ........................................................................................................ 112 4.2 The Methodological Approach ..................................................................... 113 4.2.1 The Interpretative Research Approach .............................................................. 114 4.3 A Qualitative Approach, Its Limitations and Strengths ....................... 115 4.4 Research Methods ............................................................................................ 116 4.4.1 Case Study Approach ................................................................................................. 116 4.4.2 The Justification of the Case study Approach ................................................... 117 4.4.3 Validity and Generalizability .................................................................................. 118 4.5 Data Collection Methods................................................................................. 120 4.5.1 Interviews ...................................................................................................................... 120 5 4.5.2 Observation ................................................................................................................... 126 4.5.3 Archives .......................................................................................................................... 127 4.6 The Population and Sample Size ................................................................. 127 4.7 Gaining Access.................................................................................................... 131 4.8 The Pilot Study and Analysis ........................................................................ 133 4.8.1 Pilot Study ...................................................................................................................... 133 4.8.2 Summary of the Pilot Study ..................................................................................... 136 4.9 Interview Reviewing and Translation ....................................................... 136 4.10 Organization of Data ..................................................................................... 137 4.10.1 Data Protection .......................................................................................................... 137 4.10.2 Organising and Classifying the Data .................................................................. 138 4.11 Data Analysis