Airline alliance

An airline alliance is an agreement between two or more airlines to cooperate on a substantial level. […] Alliances provide a network of connectivity and convenience for international passengers and international packages (Wikipedia, 20092). Airline alliances have been established both for the transport of passengers (global alliances) and for cargo (cargo alliances).

Airline global alliances:

  • Star Alliance
  • SkyTeam
  • Oneworld

Airline cargo alliances:

  • SkyTeam Cargo
  • WOW Alliance
  • ANA/UPS Alliance

Alliance History

The first airline alliance formed between Pan American Grace Airways and its parent company, Pan American World Airways to exchange routes to Latin America.

The first large alliance between Northwest and KLM agreed to code share as a bilateral airline alliance. Later, Alitalia and Continental formed the airline alliance, called ‘Wings’.

The movement of the global alliance began when the Netherlands signed the first open sky agreement with the United States in spite of the EU authorities’ objection.

The first global alliance, Star Alliance was formed by Air Canada, United Airlines, Lufthansa and SAS.

oneworld was launched by American, BA, Canadian, Cathay Pacific, Qantas, Finnair and Ibelia.

SkyTeam was established by Aeromexico, Air France, Delta Air and Korean Air.

Types of Agreement and Types of Alliance

Following the video is that Star Alliance demonstrates an example of strategic alliance and commercial alliance.

‘Move under one Roof’is that the member airlines can share the same airport facilities at the same terminal so that it can reduce the costs and provide benefits for smooth transit for their passengers (Wikipedia 2009Bibliography item Wikipedia2009b not found.).

Video embedded from YouTube on 17 Mar 2009

(Commercial Alliance) Referred from Doganis (20061)

  • Interline/Pro-Rate
  • Mutual Ground Handling
  • Frequent Flyer Programs – FFP
  • Code-Share
  • Block Space
  • Common Sales / Ticketing Outlets
  • Schedule / Capacity Co-Ordination
  • Joint Engineering
  • Joint Flights
  • Franchising

(Strategic Alliance) Referred from Doganis (20061)

  • Common Sales / Ticketing Outlets
  • Schedule / Capacity Co-Ordination
  • Joint Engineering
  • Joint Flights
  • Franchising
  • Common Branding
  • Joint Cargo and Passenger Services Ventures
  • Full Mergers

Benefits and Negative Impacts of Global Alliance

Global Alliance - Benefits

  • Establish extensive network through code-sharing with member airlines.
  • Create smooth transfer and convenience for travelers.
  • Share members’ airport facilities and services at airports.
  • Get a huge discount price when ordering new aircraft or aviation fuel.

(//Referred from Doganis (20061)

Global Alliance - Negative Impacts

  • Slot domination at hub airports by alliance members.
  • Create a barrier for new entrants such as LCCs.
  • Lead to lack of competition in specific routes.

(Referred from Doganis (20061)

1. DOGANIS A (2006). The airline business (2nd ed.). Routledge (New York, USA), 2006.
2. WIKIPEDIA (2009). Airline alliance. Retrieved from Wikipedia on 12 June 2009.
3. Paul J. Deveney, 'World Watch', Wall Street Journal. (Eastern Edition). New York, N.Y.:Aug 20, 1998. p. A11
4. Daniel Chan, 'The development of the airline industry from 1978 to 1998: A strategic global overview', The Journal of Management Development; 2000; 19, 6; ABI/INFORM Global pg. 489
4. Chris Lyle, Push/PullL: International Relationships, Air Transport World; Summer 2004; 41, 7; ABI/INFORM Global, pg. 24

Want to know more?

AviationKnowledge - Airline cargo alliance
This AviationKnowledge page offers more information on cargo alliances.
AviationKnowledge - Airline global alliance
This AviationKnowledge page offers more information on passenger airline alliances.

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