Sourcing strategies for disruption recovery: Empirical evidence from the US airline industry

We use data from the US airline industry to test the roles of long-term commitment and supplier diversification in counteracting disruption risk. A network airline may delegate a route to its own subsidiary regional airline (long-term commitment), or multiple regional airlines (supplier diversification). We find that the usage of both strategies is positively associated with external disruption risks. The chance of sourcing from a single subsidiary regional airline is higher when such risk is high. Once a network airline delegates a route to its subsidiary regional airline, supplier diversification no longer generates much extra value in dealing with disruption risk.