Ultra Long-Haul: An emerging business model accelerated by COVID-19. (October 2020)

• Record Type: Journal Article
• Authors: Bauer, Linus Benjamin; Bloch, Daniel; Merkert, Rico
• Is Part Of: Journal of air transport management. Volume 89(2020)
• Publication Date: 2020-10
• Subjects: Business models -- COVID-19 -- Ultra long-haul -- Innovation -- Airlines; Airlines -- Management -- Periodicals; Aeronautics, Commercial -- Management -- Periodicals; 387.7068
• DOI: 10.1016/j.jairtraman.2020.101901
• Languages: English
• ISSNs: 0969-6997

Abstract

Abstract: The COVID-19 outbreak has sent shockwaves throughout the aviation industry, sending a myriad of liquidity-strapped airlines into administration or part government ownership. In turn, this paper argues that the novel phenomenon of Ultra Long Haul (ULH) operations already maintains the necessary characteristics to generate a competitive advantage that will not only succeed, but outperform other business models, in a post COVID-19 era. Our modelling and scenario analysis results suggest that point-to-point ULH services, with access to a strong domestic feeder system, will not only require minimal adjustments to cope with COVID-19, but will simultaneously produce higher seat-load factors and yields, heightened network flexibility, and unique health benefits tied to its ability to bypass densely populated hub airports. Highlights: COVID-19 has forced airlines to fundamentally re-evaluate their business models. ULH operations have become an increasingly viable business proposition in light of the COVID-19 pandemic. ULH provides a range of unique net benefits when compared to the Hub & Spoke model. Synergised with Point-to-Point operations, ULH can provide Full Service Network Carriers with greater flexibility and agility. ULH can connect COVID-19 safe countries without the need to transfer at densely populated hub airports.