Virtual airline (economics)

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This article is about the business meaning. For computer gaming groups, see Virtual Airline.

In economics, a virtual airline is an airline that has outsourced as many possible operational and business functions as it can, but still maintains effective control of its core business.[1] Such an airline focuses on operating a network of air services, and outsourcing non-core activities to other organizations.[2] Contracting out services within the aviation industry has reportedly become so common that many carriers could be classed as having features of a virtual airline, although it is arguable whether any current carriers meet a strict definition of the term.[3][4]


Virtual Airlines seem to have their origins with the ensuing drastic changes brought about by the Airline Deregulation Act of 1978. During the hyper-competitive years immediately following deregulation, large mainline airlines found it increasingly unprofitable to compete against up start carriers on many routes they currently served. Instead of forfeiting the routes entirely, the larger carriers often made "marketing arrangements" with smaller airline carriers to fly under the "banner" or Aircraft livery of the much larger airline. These Banner carrier (Commercial Aviation) regional airlines mimicking the well known major airline carrier in adverts, prescribing to make connections as seamless as possible, soon abandoned their own local service routes and in most cases found it most profitable to completely serve the hubs as feeder airlines to the former legacy carriers.

List of virtual airlines[edit]


North America[edit]


  1. ^ Flouris, Triant (2006). Designing and Executing Strategy in Aviation Management. Ashgate Publishing. p. 91. ISBN 0-7546-3618-6. 
  2. ^ Doganis, Rigas (2005). The Airline Business. Routledge. p. 283. ISBN 0-415-34615-0. 
  3. ^ Ioannides, Dimitri (1998). The Economic Geography of the Tourist Industry: A Supply-side Analysis. Routledge. p. 118. ISBN 0-415-16411-7. 
  4. ^ Domberger, Simon (1998). The Contracting Organization: A Strategic Guide to Outsourcing. Oxford University Press. p. 146. ISBN 0-19-877458-3. "British Airways [has] lean[ed] towards becoming the first of the new general of Virtual Airlines" 
  5. ^