Gaining and Sustaining Competitive Advantage in the Airline Catering Industry - Dissertation Example

Due to the challenges brought about by the September 11 attack on the World Trade Center at the start of the decade, and the financial crisis that peaked during the second half, the airline industry suffered a serious downturn, forcing many companies to offer lower costs, no-frills passenger service.  This dissertation examined the competitive strategies employed by two leaders in the airline catering industry, the LSG Sky Chefs and the Gate Gourmet.  Like all companies specializing in on-board catering services, the two companies were adversely affected by the reduced demand and tougher security regulations imposed upon both the airline industry and the airline catering industry. 

The study found that despite the challenges to the industry which caused the closure of a number of smaller competitors, the two industry leaders undertook different strategies to enable them not only to survive but to take advantage of the changing business environment.  While both companies explored new competencies beyond airline catering, LSG Sky Chefs diversified into different onboard airline services, while Gate Gourmet undertook acquisitions to gain capacities and penetrate other markets.  Both companies continue to meet with moderate yet gradually increasing success.

The first chapter of this dissertation provides the reader with the background of the problem and the premises, assumptions, and situations that lead to the problem statement.  These discussions lay down the context of the problem and the solution that the dissertation seeks to provide.  The problem is further clarified with the statement of the research objectives and research questions, which shall provide the specific directions that will guide the research effort.  Answers which may be found to the research questions lead to the ultimate solution for the general research problem.  The significance or importance of the research topic is thereafter discussed.  The chapter concludes with a brief discussion of the ethical considerations attendant to the research.

  Background of the problem
 Historically, the airline industry has prided itself in the excellence of its service, particularly in the service of excellent fare in the tradition of the best fine dining restaurants.  Since the 1990s, however, after deregulation of the airlines' industry, no-frills flights have captured a sizeable portion of the market by offering trips at very low rates, in exchange for eliminating most of the amenities that have characterized airlines at that time, including the free meal for coach passengers.

In the past decade, there have been unexpected shocks to the industry, commencing from the September 11, 2001 attack on the World Trade Center in New York, and the Pentagon in Washington D.C.  The fact that four commercial aircraft had been hijacked and employed to propagate the terrorist act had drawn attention to the weaknesses in the security measures to protect the flying public.  As a result, flights were temporarily suspended as new measures were instituted and safeguards installed, and the shattered confidence of the flying public was rebuilt.