Strategic alliances in the world airline industry

Abstract

In recent years the airline industry has been in turmoil. Declining loads, overcapacity and a reduction in prices in real terms has resulted in massive financial losses. At the same time, the industry has been undergoing change engendered by, among others, deregulation and privatisation. Combined, such pressures have led to airlines forming alliances. This paper addresses the benefits and pitfalls. To illustrate these points a case study of British Airways is introduced. The paper concludes by speculating on the impact such alliances are having on the airline industry. © 1997 John Wiley & Sons, Ltd.

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

“…Undoubtedly, a prime motive for collaboration amongst airlines is to improve profitability; economies can be realized through shared airport facilities, combined sales operations, for example, in combination with an extended route network. [57] Thus, a principal driver for alliance formation is for the airlines to achieve cost economies of scale, scope and experience. [46] Economies of scale exist where the average cost per unit of airline output declines as the level of the airline's output increases [58].…”

Airline business strategy

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The Routledge Companion to Air Transport Management

“…The development of strategic airline alliances is strongly connected with the globalisation of tourism (Page, 2005). Even though the majority of alliances were formed after 1992 (Bennett, 1997), the early stages of alliance development go back to 1970s (French, 1997). Some of the main features of strategic alliances developed by airlines include code-sharing, joint services, joint marketing, franchise agreements and frequent-flyer benefits (French, 1997).…”