The Effects Of Strategic Alliances In The Airline Industry

In today's era of globalization, as countries around the world find their economies,inter-linked, they become economically dependent upon one another. In due course, thedemand for air travel has extensively increased and has spread to more destinationsaround the world than ever before. A growing number of carriers realized theimportance of having access to major airlines market of the world and this could beachieved in co-operating with another carrier. This study is concerned with the allianceactivity within the airline industry and tests whether it can help the firms gaincompetitive advantage. It looks for the factors that motivate airlines to enter intoalliances with their competitors and it also refers to main criteria of choosing the "right"partners.The formation of strategic alliance is a fairly new trend in the airline industry andis in line with increasing globalization of the world economy and of the tourism industry.Companies, that are often compete, enter into alliances in the hope that it allows them toreach a number of strategic objectives, the most important of which is to gaincompetitive advantage at the global marketplace.The study aims to examine three aspects of how to format strategic alliances,where the benefits could gain from the strategic alliances. Furthermore, we areconcerned with the alliance activities within the airline industries and tests, whether itcan help the firms gain competitive advantage in the airline industry.First of all, I will put a focus on examining the factors with this study whichmotivates airlines to enter into alliance with their competitors. Secondly, to examine thebenefits gained from the alliances of both by the airlines and by consumers. Thirdly, Iwill discuss problems not only encountered by airlines when forming strategic alliances,but which I have found getting through many data. Finally, I will make possibleconclusions through all process.The case study has been conducted based on the Star Alliance Group. Theresearcher found that in the majority of data the companies did feel they had gainedcompetitive advantage from the alliance. The major benefits for the airlines wereimproved economic performances, increased market share and easier access to newmarkets. Consumers are felt to have benefited from the strategic alliance through theprograms which airlines' members offered as special services such as the check throughfacilities, code-sharing, Frequent Flyer Program (FFP).The content analytical study was followed up by a survey of marketing managersof airlines having already formed partnerships. Gaining wider and more distribution ofpartners is considered to be a factor of crucial importance for the success of an allianceand wide geographical influence, as well as some long-term goals are supposed to bethe most significant features than an 'ideal' partnership. On the whole, by enteringstrategic alliances seem to gain competitive advantages.