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Star Alliance

International Business Class
by

Alexandra Martin

on 19 February 2013

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Transcript of Star Alliance

Produced and Presented by
Leone Manfredini 12325544
Laura Mansour 12244812
Chris Hieb 141840681
Alexandra Martin 12452088
Roman Freudenberg 140659611 Aim of alliance History Implications for Consumers Founded by five companies in May of 1997

Met with mostly favourable regard

Introduction of alliance competition

27 members today Seamless air travel experience
Value and satisfaction
Loss of passenger amenities
Service failures
Loss of direct control
Unawareness of the alliance Advantages Increase revenues
Code-sharing
Extend reach
Acceleration to market
Overcome regulation
Mitigate local risk
One-off costs of consolidation
Protect against new entrants Future of the alliance Strengthen presence in China

Deal with the exit of US Airways, following the American Airlines and US Airways Merger ($11Bn)

Deliver value and satisfaction. Any questions? Structure & Table of contents Aims
History
Consumer implications
Regulations
Advantages for members
Disadvantages for members
R&D
Financial stability
Focus on BMI
Future prospects
Opportunity for questions Financial Stability Disadvantages Initial systems integration
Exposed to others’ failure
Changes in public policy and regulations
Member co-operation
Online competition All five founders made losses
Two Chapter 11 bankruptcies “Make travel smoother”

Provide customers with a greater number of daily flights and destinations for their convenience "Your success is my success and your failure is my failure" Strategic Alliances can relax R&D constraints and mitigate the risks inherent to R&D

HOWEVER,

When partners form an alliance mainly to reduce R&D costs, collaborative R&D is more likely to be a losing strategy in the long run Strategic alliances tend to restrict the level of competition
The airline industry was heavily deregulated in the United States in the late 70’s
Companies were able to grow in size without being challenged by government airlines
Star Alliance has been able to govern the international market place by using code shares and sharing resources Focus on BMI Focus on BMI Alliances do not involve equity
Contracts can be broken easily
BMI left Star Alliance as a result of the sale of the UK based carrier to IAG
BMI joined Oneworld, Star Alliance's biggest competitor BMI's withdrawal did not influence Star Alliance's global reach
Major implications were
condensed market share
loss of a UK based airline
unaccommodating Heathrow premises for passengers
Loss of BMI has affected UK presence Regulations & Implications on Star Alliance
Full transcript