Why Distance Still Matters in Aviation Marketing and Global Trade Decisions

Hello, my friends, and welcome to Educated Marketing Decisions—your monthly dose of practical marketing strategies tailored to the aviation industry!

In aviation, we often think distance is our business—after all, our entire industry is built around connecting people and cargo across it. But when it comes to entering new international markets, expanding MRO networks, or even sourcing parts and materials, we can’t treat “distance” as just miles on a map. It’s more complicated—and more strategic—than that.

Harvard Business Review’s classic insight, “Distance Still Matters” (HBR, May 2001), reminds us that while global communications and air travel have “shrunk” the world, the invisible forces of cultural, administrative, geographic, and economic distance still shape trade, influence risk, and define success.

Let’s look at how these dimensions apply specifically to aviation—and why smart market analysis must go far beyond GDP and population stats when entering or trading with new countries.

1. The Flawed Allure of GDP: Why Country Portfolio Analysis Falls Short in Aviation 

Too often, aviation executives make expansion or sourcing decisions based on market size or per-capita wealth alone. This classic tool—Country Portfolio Analysis (CPA)—prioritizes sales potential but ignores the costs and barriers of doing business across borders.

As HBR puts it: “They become so dazzled by the sheer size of untapped markets that they lose sight of the vast difficulties of pioneering new, often very different territories.” 

In aviation, these oversights can be especially costly. For example, launching a component repair station in a high-GDP nation with strict aviation safety regulators (think Germany or Japan) may cost far more than setting up in a smaller country with bilateral agreements and shared standards (like Canada or Singapore).

2. The CAGE Distance Framework—Aviation’s Must-Use Tool for Market Analysis 

The four types of distance that affect trade—and aviation deals—are:

• Cultural Distance: Language, values, consumer behavior.
• Administrative Distance: Political stability, legal systems, trade agreements.
• Geographic Distance: Proximity, infrastructure, time zones.
• Economic Distance: Labor costs, income levels, and productivity.

According to research by Frankel & Rose, “countries 5,000 miles apart trade only 20% as much as those 1,000 miles apart.” Even more telling: sharing a language boosts trade by 200%, while a shared border increases it by 80%.

In aviation terms, a country’s proximity to global hubs, ICAO alignment, and bilateral air service agreements can radically shift the real cost of doing business—even if GDP numbers look similar.

3. Cultural Distance: Why Local Knowledge Trumps Assumptions 

In the aviation world, culture doesn’t just show up in in-flight meals—it affects everything from hiring engineers to marketing private jet services.

HBR notes that “TV is hardly cement”—a jab at Star TV’s failure to localize content in Asia. Similarly, aircraft interiors, charter services, and even hangar design expectations vary widely across cultures.

For example, an MRO expanding into the Middle East must navigate different privacy expectations, religious holiday schedules, and business etiquette norms. Ignoring these subtle cues can stall deals and damage relationships.

4. Administrative Distance: The Deal-Maker (or Breaker) 

From a regulatory standpoint, aviation is one of the most politically sensitive industries. Civil aviation authorities, trade zones, defense-related restrictions, and protectionist policies all create friction.

“Foreign ownership of broadcasting businesses... is always politically loaded,” HBR reminds us. In aviation, it’s even more so—with national carriers, dual-use technologies, and maintenance certifications on the line.

Example: Companies like Airbus and Boeing regularly navigate administrative distance when negotiating contracts across borders—especially with state-influenced airlines or in countries with restricted procurement policies.

5. Geographic Distance: More Than Miles—It’s Infrastructure 

Aviation logistics should conquer distance—but in reality, time zones, supply chains, and airspace restrictions make geographic distance a persistent challenge.

HBR highlights that even in capital markets, “cross-border equity flows fall off significantly as geographic distance rises”—not due to freight costs, but due to weaker information infrastructure and trust.

For aviation, a parts supplier in Vietnam might be closer to you than one in Brazil—but if the Vietnamese partner lacks direct flight routes, consistent export protocols, or reliable customs handling, your lead times and AOG risks spike.

6. Economic Distance: Cost Arbitrage or Complexity Creep? 

It’s tempting to chase lower labor or manufacturing costs—but aviation businesses must weigh those savings against the complexity of compliance, oversight, and quality control.

“Companies that rely on economies of experience and standardization should focus on countries that have similar economic profiles.” (HBR)

Translation? If your company’s value lies in FAA-certification-level quality, trying to replicate it in a low-cost country without equivalent infrastructure or training standards may backfire.

7. What Aviation Can Learn from Pizza (Seriously) 

HBR’s case study on Tricon (owner of KFC, Pizza Hut, etc.) shows how applying CAGE can flip strategy. Initially, Mexico looked like a small market. But once analysts adjusted for distance—shared border, trade bloc, proximity—Mexico jumped from #16 to #2 in priority.

Aviation execs should take note: sometimes the “obvious” growth markets aren’t the most strategic. Closer partners with fewer barriers may yield better margins, faster timelines, and more resilient relationships.

Don’t Just Think Big—Think Close 

Distance still matters—perhaps more than ever. For aviation brands expanding globally or sourcing internationally, success hinges not on the size of a market, but on your proximity to it across all four dimensions.

Before making your next move, ask:

• How different is the culture—really?
• What legal or political hurdles exist?
• Can we efficiently move people and parts?
• Is the economic structure aligned with our model?

The CAGE framework is a mindset shift aviation leaders must embrace—not just to avoid failure, but to strategically scale smarter.

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Rebekah Knaster
Founder, Becks and the Jets LLC
#yourcmoondemand

Sources: 

• “Distance Still Matters,” Harvard Business Review, May 2001, by Pankaj Ghemawat
• Frankel, J. & Rose, A. (2000). “An Estimate of the Effects of Currency Unions on Growth,” unpublished working paper
• Alford, W. (1995). To Steal a Book Is an Elegant Offense, Stanford University Press