Airline Expansion: a real project of a strategic model development

The purpose of this master's degree thesis is to describe a real project that I carried out during my internship abroad in a well-established airline. It consists in evaluating a possible market expansion to Italy by a foreign air carrier, which herewith is called ¿Balbo Airlines¿ for confidentiality. The method used has been the development of a strategic model that combines both horizontal and vertical analysis of the aeronautical sector, taking into account that the competitive scenario in which the Italian airlines are operating is particularly dynamic and turbulent, due both to endogenous and exogenous factors. The computation uses database and statistic programs as the ones of Istat and PaxIS and a comparison of the method has been done with existing ones. Then a financial analysis of the project has been performed to understand if it would be worth for the company to make this move. The analysis shows that the Italian market is still poor in direct connections from the southern region to other Italian and European cities and that there is room for a profitable expansion of the air connections. Therefore, expansion to this market is a positive option for Balbo Airlines. The thesis covers the literature gaps concerning the market expansion of airlines and, in particular, it highlights practical methods to follow the model describing the analysis step by step. Besides, this model, with some adjustments, is also applicable to other companies active in different transport sectors.