Sustainable business models for the state-owned African airlines

Abstract

The entrance of the low cost carriers business models has been widely praised for challenging several inefficient airline business practices. However, currently business models of both traditional carriers and low cost carriers worldwide are being tested through the global crises. In the current operating environment, many "legacy" airlines worldwide have implemented extreme financial and operational measures to stay afloat. The costs of operating airlines are getting higher while the revenue bases are shrinking. The aim of this paper is to assess the current state-owned airlines in Africa. It will highlight some of the inherent weaknesses and identify elements within their operational models that can improve their sustainability. Some of the elements that will be analysed vary from growing the network though mergers to investor funding models for capital, etc. The survival and sustainability of African airlines within today's aviation market lies their ability to operate cost effectively and prudently to adopt low risk capital and operational business models