Keywords: air freight, air cargo, airlines, airline deregulation, process innovation, product innovation, marketing innovation, innovation dynamics, industry life cycle, IPR, intellectual property, Federal Express, FedEX, UPS, United Parcel Service, competition, USA, United States
Up, Up, and Away: The dynamics of innovation in the US air cargo transportation industry
In 1978, the United States (US) Congress passed the Airline Deregulation Act, allowing all-cargo airlines to compete in an industry that was heretofore highly regulated and stagnant. As companies came and went, successful carriers realised that innovation was necessary to survive. This study analyses the dynamics of innovation over the industry's life cycle using Intellectual Property (IP) data. Results indicate that despite having the characteristics of a commodity, the industry follows a reverse life cycle. Furthermore, Federal Express Corporation (FedEx) and United Parcel Service (UPS) hold the highest levels of innovation while dominating the market, signifying that innovation should be integrated into the competitive strategy of carriers searching for sustained competitive advantage.