Separation or integration?: Can network carriers create distinct business streams on one integrated production platform?

The worldwide airline industry is currently facing one of the most severe crises in its history. Particularly affected are the network carriers, which need to develop more distinct products to adapt to the changed market environment. Since structure needs to fit strategy, the question of how the network carriers need to design their organization arises. So far carriers have either used one flight operation (production platform) as a basis for all products offered, or have built separate organizational entities for each business segment. From a corporate strategy point of view this paper compares the efficiency and effectiveness of an integrator versus a separator approach. The analysis indicates that the integrator approach is both less efficient and effective and it is argued that the network carriers should preferably operate with separate entities. (C) 2003 Elsevier Ltd. All rights reserved.