Strategic reorientation and business turnaround: The case of global legacyairlines

AbstractPurpose - We illustrate how legacy airlines can reorientate to achieve sharprecoveries in performance following prolonged periods of stagnation, decline anderoding competitiveness.Design/methodology/approach - The authors use a qualitative analysis of fivelongitudinal case studies of legacy airlines that embarked on strategic changebetween 1997 and 2006. Data collection spanned ten years and included archivaldata, public documents, news clippings, accounts in specialist books andinternal company documentation.Findings - The paper identifies two distinct approaches for reorientation in thelegacy airline industry. Companies that have fallen behind and are in risk offailure focus on regaining customer trust and loyalty, and restructuring routenetworks, business processes and costs in an ‘improvement and innovation'reorienting approach. Underperforming airlines, for whom growth has declined intraditional markets and who note that opportunities exist elsewhere, focus onproduct and service development and geographical growth in an ‘extension andexpansion' reorienting approach.Practical Implications - The paper develops a framework for successfulreorientation in the legacy airline industry. This framework encouragesexecutives to focus on and leverage profit maximization, quality, leadership,alliance networks, regional consolidation and staff development during periodsof strategy formulation and reorientation.Originality/value - This research addresses the dearth of understanding andattention afforded to the concept of reorientation in the literature onstrategic turnaround. The research also serves to emphasize the presence andimportance of reorientation as a strategy of change within the legacy airlineindustry. Furthermore, in demonstrating how this strategy can be implemented ina sharpbending or performance improvement context, this study illustrates howreorientation is intertwined with the broader turnaround process.