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Posts: 891
Joined: Tue Jul 25, 2000 12:16 pm

Leaders Versus Followers In The Airline Industry

Fri Sep 17, 2004 11:57 am

We were talking in my marketing class today about potential advantages of sometimes not being the first in teh industry that you can learn from other's experiences and avoid "teething" problems.

I wanted to know how that argument could apply to the airline industry.

Here are just two examples:

1) new aircraft types: the airlines that get the original aircraft are often the ones that face the most problems (is this true?) IIRC, didn't airlines that first ordered the 747 had several problems?

2) Cabin technology.
I think British Airways was the first to come up with both the "cacoon" seat in First Class, as well as the flat bed in Business Class. Others have since emulated them, and in some cases surpassed them.

The bottom line of my question is which counts more: the innovation and prestige of being the first to introduce a product, or foregoing that to wait for a product to emerge and then adopt it once other airlines have ironed out the problems.

Posts: 929
Joined: Thu Sep 12, 2002 10:07 am

RE: Leaders Versus Followers In The Airline Industry

Fri Sep 17, 2004 6:41 pm

Hi AT!

Obviously there is no general answer to your question. You can't just say one strategy is right and the other one is wrong. Leader vs. follower would have to be decided from case to case.

I am sure that every new aircraft type as teething problems (just like new cars...), which is why the launch customers usually receive a significant discount. A new aircraft type potentially offers operational savings due to newer technology, probably a better inflight experience and so on, which might make up for the occasional problem.

There are lots of factors involved in a decision regarding new produtcs or aircraft with differing requirements and factors from airline to airline, so I am sorry to say again there's no right or wrong strategy in general. You would really have to look at circumstances.


Yours truly - StarFlyer

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