At Their own Will: Success and Failure of Airlines After Deregulation
| Authors | |
|---|---|
| Year of publication | 2021 |
| Type | Article in Proceedings |
| Conference | Proceedings of the 16th European Conference on Innovation and Entrepreneurship |
| MU Faculty or unit | |
| Citation | |
| Keywords | success; deregulation; breakthrough event; Icarus paradox; strategic persistence; qualitative comparative analysis |
| Description | The deregulation of the U.S. air transportation industry in 1978 has served both as an inspiration for subsequent deregulation efforts and as a natural experiment of firm behavior under significant environmental change. The deregulation hurled many airlines into a qualitatively different business context in which they needed to re-establish their competitive positions. Our research aims to identify airlines' characteristics connected with success or its absence in the early postderegulation era. For this purpose, we use Qualitative Comparative Analysis (QCA) that allows us to observe airlines' characteristics in their combinations, not as independent factors. The method enables us to point out the equifinality in airlines' success, meaning that there were several ways how airlines could have become successful. We find that there were no clear pathways towards post-deregulation success. Yet, the results suggest (with borderline significance) that large airlines that changed their strategy succeeded. Regarding the absence of success, we find three combinations of conditions that explain the lack of success with a relatively high significance. Both results for the presence of success and its absence provides some support for the Icarus paradox. In this phenomenon, a satisfactory past performance causes a strategic persistence that is rendered dysfunctional during and after the breakthrough event and causes airlines' decline. |