Innovation Ecosystem Strategies of Airlines: An Overarching Perspective for Strategic Alignment

Abstract

The airline industry is going through a big transformation. The institutional environment as well as the industry itself has changed. Competition with the entry of the low-cost carriers in a market that used to be dominated by flagship carriers and societal pressure regarding sustainability on airlines with COVID-19 state aids increased, while the shortage in the labour market limited the pace of recovery. The technologies that airlines use to operate have been outdated to cope with today's massive challenges. All of these changes forced airlines to innovate to maintain their services. During the era of technology, these innovations can be better nurtured within an innovation-conducive environment, which might be seen as an ecosystem designed for the co-creation of value through collaboration. In the last decade, both managers and scholars showed an increasing interest in the concept of innovation ecosystems, which provides a holistic perspective for value creation. However, despite its potential, the implementation of the innovation ecosystems in the airline industry and how it can support an airline to implement its innovation strategy has not been investigated. By conducting literature research and qualitative embedded case study, this research concludes that implementation of innovation ecosystems and innovation ecosystem strategies can help an airline to achieve its objectives on innovation and implement its innovation strategy by aligning its innovation processes, overcoming the barriers to innovation that hampers its innovation processes and finally facilitating the collaboration within and beyond the value chain to develop radical innovations that are required to cope with today’s complex challenges.