Applicability of target costing method as a strategic management tool in airline companies

With the increasing globalization of competition in airlines, unit revenues are decreasing gradually. Airline companies that manage their costs effectively in a globalized environment, constantly, improve them and keep their costs under control, gain competitive advantage. Strategic management is important in order to ensure the long-term profitability, maintain its competitive position and increase the durability of the business against fierce competition conditions in the environment of high competition. The application of target costing method, which is one of the strategic management tools, in airline companies constitutes the aim of this study. The study consists of three parts. The first and the second sections are theoretical portions, in the third section it is also evaluated the results of the survey studies which is applied to airline companies in Turkey. The suggestions developed by combining the theoretical information with the analysis of the application results are presented. It was determined that 2 of the 5 airline companies participating in the study applied the target costing method within their existing accounting systems, while the 3 companies did not apply the target costing method. It has been determined that the companies, who state that they do not apply the method, are aware of the target costing activities in accordance with some principles and features. Keywords: Strategic management, Target costing, Airline companies