Assessing the resilience of airlines to geopolitical shocks – Case Finnair
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Journal Title
Journal ISSN
Volume Title
School of Business |
Master's thesis
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Author
Date
2023
Department
Major/Subject
Mcode
Degree programme
Global Management
Language
en
Pages
114
Series
Abstract
Objective of the study Nowadays, global leaders consider geopolitical shocks to be a major concern. Given the frequency and severity of such shocks in recent years, the importance of this area of research should not be overlooked or underestimated. This thesis seeks to address these challenges by focusing on the resilience of airlines in the face of geopolitical shocks. Despite the growing importance of resilience, research on the impact of geopolitical shocks remains relatively scarce. This study focuses on Finnair, a Finnish network airline that has been significantly affected by recent geopolitical shocks: Covid-19 and the war between Russia and Ukraine. Data and methodology The literature review of this study utilises the previous research regarding geopolitical resilience and airline resilience. The topic is examined through a conceptual framework that consists of three phases: readiness and preparedness, response and adaptation, and recovery and adjustment. From these phases, crucial elements of geopolitical resilience (business model, reputational, organisational, operational, technological, financial) in the airline industry are identified and researched. The empirical part is conducted as a case study for a Finnish network airline Finnair, utilising a qualitative study method. Qualitative data was collected by semi-structured interviews with Finnair executives. All empirical data was collected between April and May 2023. Main findings The empirical results highlight the effectiveness of scenario planning, financial resilience, organisational structure, business model adaptation and operational efforts in improving airline resilience. Finnair's strong focus on preparedness and resilience, including scenario planning and financial resilience, contributes to its ability to cope with geopolitical shocks. The company has solid industry experience and expertise that enables it to respond quickly and effectively. Furthermore, Finnair's ability to adapt to constantly changing situations, e.g., by changing its strategies and business model, reflects its efforts to remain competitive. From the perspective of the conceptual framework, the most important out of the six elements of geopolitical resilience in the case of Finnair were operational and financial resilience.Description
Thesis advisor
Seristö, HannuKeywords
airline Industry, geopolitical shock, covid-19, Russia-Ukraine war, geopolitical resilience, Finnair
