The impact of external growth strategies on airline corporate branding

The deregulation and the overcapacity of many industries have led to a record level in external growth operations in the late 1990s (Doyle 2000). Nevertheless, development by acquisition tends to be selective in terms of industry sectors. In banking, insurance, pharmaceutical, airline and automotive industries, the number of mergers, acquisitions and alliances is particularly high compared to other sectors (MANDA 2007). The airline sector, in particular, has been very dynamic in terms of external development strategies over the past years. The airline market has been fragmented for a long time but the number of players in the air transport sector is now shrinking and has entered a phase of consolidation (Euromonitor 2007). In order to face this phenomenon, more airlines were tempted to achieve the critical mass needed to meet the high capital requirements of the industry. Similarly other industries, mergers, acquisitions and strategic alliances allow airlines to lower costs through rationalization and reduce competition and enhance market power. All these advantages are often viewed as strategic to face the new forms of competition, especially those coming from low cost airlines.

[...] Conclusions The research suggests that every external growth operation, whatever its form, has an impact on the corporate brand equity of the airline. It always develop the awareness of the brand, altered the perceived quality, the reputation and confidence of stakeholders ; in a positive or negative way depending on the results of the operation especially in terms of synergies. But further quantitative research is needed to generalize these results. Particularly, these changes observed in the brand equity of airlines are the direct consequence of the impact the external growth operation had on brand elements. [...]

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[...] Sustainability is the second core value of the group, which intends to achieve its growth while trying to reduce the impact on the environment. The company’s corporate culture also fosters active engagement in social projects. Swiss was easily integrated to these values because the two brands are very similar on these points. Indeed Swiss places a strong emphasis on customer satisfaction as well. Moreover Swiss company’s values are in tight alignment with the values of its related country, which has for a long time encouraged environment-friendly behavior and share a lot with its neighbor, Germany. [...]