Abstract for: Application of System Dynamics to assess competitive rivalry in the airline industry - A Case Study
The present study applied system dynamics modelling to assess the competitiveness between airlines from Germany to Asia. Legacy airlines like Lufthansa, Singapore Airlines or Cathay Pacific who traditionally served a majority of travellers between Europe and Asia have come under pressure through airlines from the Gulf region, but also other European airlines, like Turkish Airlines or Finnair who position themselves as gateway. Some of these airlines offer lower airfare than their competitors, but a similar or even better product and according to their financial statements are in a sound condition. Therefore tools and processes were necessary to assess the internal resources of the airlines in scope - Emirates and Lufthansa - and to model the competition. Consequently, an exploratory-descriptive case study approach was chosen to set the scene and take this data into the system dynamics modelling. Due to the identification of key resources, changes to them were modelled to evaluate the dynamics of the system. It was found that system dynamics guides the researcher through the different tasks and forces to rethink and reapply certain steps to get to the notion, which resources contribute to the success of the airline.