Differences in Airlines Business-models and Passenger Perceived Level of Service Differentiation

Air transport is an industry, which influence significantly on regional economic systems. Despite the product complexity, airlines show 7,23% annually growth rates from 2011 to 2018 . The drivers of such growth are, on the one hand, external factors, for example, geographical expansion, on the other hand, internal variables associated with increasing the efficiency of air transportations, changing the technological base and business model elements, cooperative links between companies in value chain. In this regard, attention focused, on the one hand, on trying to identify trends in the evolution of airlines business models, on the other hand, on determining the factors of passenger flow stability in the nowadays and strategic perspective. Dissertation examines the value proposition as a driver for the transformation of the air transportation market. Research aim is to study the development of the value proposition of airlines in a historical and current perspective. To solve this problem, we compared theoretical approaches to describing changes in evolution of value proposition, conducted empirical research of current and strategic practices of Russian airlines value proposition development, identified passenger’s perception of airline service differences, and developed short-term and medium-term recommendations for airlines. Research will be relevant both the research community in the field of airline management and airlines.