Global airline alliances and profitability: A difference-in-difference analysis

Douglas, Ian; Tan, David

doi:10.1016/j.tra.2017.05.024

Cited by 33 publications

(27 citation statements)

References 11 publications

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“…For airlines, global alliances are a significant strategic resource and a learning tool [27]. Through an international alliance, an airline can expand its global networks [36] and strengthen its market status. Through co-purchasing fleets and fuel, and sharing ground staff, lounge facilities, fleet maintenance fees, and computer reservation systems with alliance partners, airlines can reduce their operating costs [5].…”

Section: Global Airline Alliances and Passengersmentioning

confidence: 99%

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Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

Seo

Itoh

2020

Sustainability

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Over the past several decades, the aviation industry has been reshaped, centering on global alliances, and these have grown exponentially. However, it is still not clear whether they are achieving sustained competitive advantages, and what are the specific competitive advantages of the three alliances (oneworld, SkyTeam, Star Alliance) arising on the customer side. This study aims to examine whether global alliance groups outperform the non-alliance group, how the three alliances differ regarding passengers’ perceptions, and what their competitive advantages are. A hybrid text mining analysis was adopted as this study’s method. Frequency tests, t-tests, one-way analysis of variance tests, and three-step mediated regression analyses were performed using 6393 ordinal and word-of-mouth (WOM) data. We found that the degree of passengers’ perceptions of alliances was low, the non-alliance group outperformed the alliance groups, and there were no significant differences between alliances on service rating and sentiment score. Only oneworld has competitive advantages that link to passengers’ service rating and sentiment score. These findings imply that alliances could not ensure competitive advantages that derive from customers’ perceptions, and although passengers partly perceived several selling points, their differentiation strategies are not successful.

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Section: Global Airline Alliances and Passengersmentioning

confidence: 99%

“…Finally, even though it is recognized that the three global airline alliances have been predominant for several decades in the aviation industry [7,8,19,20,36], little research has focused on their relative competitive advantages and differentiation.…”

Section: Introductionmentioning

confidence: 99%

Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

Seo

Itoh

2020

Sustainability

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“…Furthermore, these kind of alliance activities can help airlines to reduce the cost per passenger, taking advantage of economies of scale, scope and density across geographical boundaries due to increased traffic, joint advertising and equipment sharing, as well as accessing resources that would otherwise not be attainable [7,8,13]. Many studies have investigated the positive impact that these collaborative partnerships have on airlines' performances i.e., [14][15][16][17][18].…”

Section: Introductionmentioning

confidence: 99%

The Contribution of Global Alliances to Airlines’ Environmental Performance

2019

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Global alliances have traditionally been related to improvements in the economic and operational performances of companies, particularly in the airline industry. However, we still do not know the effect of the participation in this kind of multilateral agreement on the environmental performance of airlines. The main aim of this work is to analyze whether the alliance membership of airlines has an effect upon their environmental performance, and if so, whether or not the characteristics of the global alliance, as well as the business model of the airline, may influence this relation to a greater or lesser extent. The results of regression and Analysis of Variance (ANOVA) in a sample of 252 airlines (58 included in one of the three global alliances: Star Alliance, Oneworld, and SkyTeam) show a strong and inverse relationship between environmental performance and belonging to an alliance. The paper also shows empirical evidence of the influence of the business model of the airline on environmental performance. These results suggest important implications for managers facing challenges regarding sustainability.

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“…[3] Airlines have also ratified strategic alliance agreements and partnerships in order to create competitive advantage, reduce their costs, and to expand their marketable network reach. [4] In the broadest sense, alliances involve collaboration between two or more businesses that retain their autonomy during their relationship [5]. In the global airline industry there are many different types of alliances: asset pools [6,7], blocked-space, revenue sharing and "wet-lease" agreements [8], code-share agreements [9,10], cost-sharing ventures [7,11], equity investments [7,12], feeder agreements [7,13,14], interline pro-rate agreements [15], marketing alliances [7,9,16], and joint ventures [7,9].…”

Section: Introductionmentioning

confidence: 99%

Capturing and Delivering Value in the Trans-Atlantic Air Travel Market: The Case of the Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways Strategic Joint Venture

Baxter

2019

MAD

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<p class="keywords">This paper presents a case study of the Air France-KLM, Delta Air Lines, and Virgin Atlantic transatlantic joint venture, one of the world’s largest strategic passenger joint ventures. The study used a qualitative research approach. The data gathered for the study was examined by document analysis. The strategic analysis of the joint venture was based on the use of Porter’s Five Forces Model. The study found that the joint venture has evolved over time through the addition of KLM Royal Dutch Airlines, Alitalia, and Virgin Atlantic Airways to the original joint venture between Air France and Delta Air Lines. The joint venture has provided significant synergistic benefits to the partners and has allowed the partners to access new markets and to participate in the evolution of the transatlantic air travel market, one of the world’s major air travel markets. The joint venture has also enabled the venture partners to enhance their competitive position through strengthened service offerings, a comprehensive route network that offers customers a high level of connectivity, and greater flight frequencies within their own route networks, all of which creates value for the partners. A limitation of the study was that the annual revenue, revenue passenger kilometres performed, or passenger load factors data was not available. It was, therefore, not possible to analyze the business performance of the joint venture.</p>

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Global airline alliances and profitability: A difference-in-difference analysis

Cited by 33 publications

References 11 publications

Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

The Contribution of Global Alliances to Airlines’ Environmental Performance

Capturing and Delivering Value in the Trans-Atlantic Air Travel Market: The Case of the Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways Strategic Joint Venture

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