The article “Competitive effects of the airlines-within-airlines strategy – Pricing and route entry patterns” by Winai Homsombata, Zheng Leib, and Xiaowen Fuc discusses the airline within airline strategy adopted by Qantas airline group in Australia, as the company operates full-service carrier Qantas Airways, and runs contiguously Jetstar Airways, and how, unlike in other regions of the world, this strategy has demonstrated positive results. The author investigates airline pricing and route entry patterns in the Australian domestic market as key elements that led them to determine that Jet Airways has been used as a “fighting brand” against rival low-cost carriers. The audience to which the author directs their work is clearly industry-savvy, transport experts and professionals from the logistics spectrum, who understand how different elements of structuring and airline can have a great effect on how its operations are going to be carried out to maximize profits and efficiency. It is clear the purpose is informative, and the authors accomplish to demonstrate important insights into the aviation industry, dual-brand utilization, and how the implementation of the strategy increases ticket prices at the expense of rival lowcost carriers. The article uses a wide array of official data compilations to effectively persuade and make the audience understand how an “a-typical” approach to competing with Low-Cost Carriers and introducing a new player in the market could turn into better profit margins and market share. Now, the article mainly focuses on how Jetstar Airways is used as a fighting brand, and how that has enabled the company to exercise increased market power and quality service improvements, as the company has managed to get positive pricing benefits. The authors state how risky it is to run two distinct business models within the same group in the airline industry, but ultimately agree that the feat can be successful if the company manages to exert sufficient market dominance, thoughtful network planning, and ample coordination between the two entities (Homsombat, 2014). Nonetheless, it fails to explain how this model was not successful in the North American and European territories. The main supporting point of the efficacy of this model structure is that it allows the airline group to drive fare prices up, as it also has quality and competitive effects (Homsombat, 2014). The article is well structured, the authors continually achieve to explain each issue and topic separately, supporting their analysis with industry case studies and several data-driven evidence in charts that display different market statistics that help prove how successful the model is. The authors rely on the logic of their statistics, appealing to logos due to the business nature of the topic. By creating their own equations, they are only trying to assert their found insights in a logical manner and to explain the effect of the model on airfares, they use raw data that appeals to their credibility, by being backed by industry experts and official figures. “Frequency and capacity data were compiled from the Official Airline Guide (OAG) database” (Homsombat, 2014). There is no appeal to pathos as this study is business-centric and is based on numeric facts. The strategies used by the author successfully appeal to their primary audience as they use technical vocabulary from the industry to support their main objective of conveying how this business model is positively affecting Qantas Airline Group’s performance. Their logic and numerical approach serve as an example of excellent data analysis that ultimately aids in accomplishing their main objective of explaining how the airline benefited from this practice as it helped them obtain better revenue in different markets by driving prices up with the introduction of their two brands, asserting market power and allowing service quality improvements. References: Homsombat, Lei, Z., & Fu, X. (2014). Competitive effects of the airlines-withinairlines strategy – Pricing and route entry patterns. Transportation Research. Part E, Logistics and Transportation https://doi.org/10.1016/j.tre.2013.12.008 Review, 63, 1–16.
