What does the term "wholly owned subsidiary" refer to in the airline context?

In the context of the airline industry, the term "wholly owned subsidiary" refers to a company that is completely owned by another company, which is typically the parent company. This means that the parent company has full control over the subsidiary's operations, management, and revenue. By having a wholly owned subsidiary, the parent company can manage its operations effectively and align them with its overall business strategy.

This structure allows the parent company to expand its market presence, diversify its services, or enter new markets while retaining ultimate authority and financial oversight. For instance, airlines may have wholly owned subsidiaries to operate regional services, low-cost carriers, or specialized divisions that cater to specific market segments.

Understanding this concept is vital for recognizing how airlines structure their business operations and leverage resources to maximize efficiency and profitability. It also highlights the strategic importance of maintaining control over operations in competitive markets.