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Airline Alliance - who benefits?

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Diego Agnes Machado

on 21 September 2012

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Transcript of Airline Alliance - who benefits?

Diego A. Machado Airline Alliances - Who benefits? Introduction What is?

Only modest gains, so why the need of forming alliances?

Two major types of alliances:
Parallel; Code sharing;

Block spacing;


Franchising; 63,6% world share of passenger traffic;

55,8% of passenger numbers;

58,4% of group revenue;

Despite this, are the alliances able to producing significant advantages to it's members? Dominant market shares: Enormously complex to manage successfully;

Frequently subject to:
Poor performance;
Premature dissolution; Other ways to survive EasyJet Ryanair Southwest Performance Success:
Non-economic Growth Cycles of:



Readjustment Outcomes and advantages Access to new market
Traffic feed into established gateways
Defense of current markets
Resources pooling across operational area or cost centers Increases in flight frequencies Increased market share on the code-sharing route Enhance the market power Increases in profitability Improvement in connecting services Conclusions Airline industry operates in thin margins; Alliances could be interpreted as a means to preserve these margins rather than an attempt to generate large producer surpluses.
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