Strategic Alliances Of Airlines : Economic Benefits For Consumers And Airlines Companies

6.1.2 Strong brand and alliances. It has strong brand, ties and alliances; with its large market share American Airlines is known for its unique personality, which is recognized by its customers through good quality products and services received. The company has strong international ties and alliances, “American is one of the founding members of one world alliance, whose members and members elect serve more than 1,000 destinations” (American Airlines 10-K, page 5), such alliances increase flight frequencies in international markets for American Airlines. An alliance such as one world could

Delta airlines have multilateral and formed alliances with other airlines. This is beneficial since the airline is able to gain access to international airlines. By forming alliance, the airlines share

Air Canada has been in the business of air transport for an extended period of time. Due to the experience and the exposure of the carrier in the field, it has made a commendable progress through many strategies as well as customer proximity. One of the approaches taken by the airline involves the identification as well as an implementation of cost reduction initiatives in a bid to increase revenue from its operations (Air Canada, 2016). It is also attempting to connect with the existing carriers across the world to connect the current customers to the international world. This approach has been adopted to increase its competitive advantage over other existing airlines.

First, the organization can deliberate on the procurement of other minor aircraft to strengthen its position in target markets to further conquer more market shares, e.g., it may invest or acquire local carriers and further upgrade their whole deal flights. As such, clients can select its subsidiary local auxiliaries or via utilization as reciprocal. The Dragonair is a fabulous example demonstrated by its actions. Accordingly, clients will be availed to possess the capacity to choose to agilely orchestrate their routes with Cathay Pacific Airways at all levels arranging from provincial to worldwide.

This section will examine each of the five competitive forces that are active in the European Airline Industry. In this instance the buyers in the industry will be taken as passengers. Fuel companies, aircraft manufacturers and employees are the suppliers. Substitutes stem from modes of transport that fall under land and sea transit. Potential entrants are any airlines based outside of Europe or newly founded airlines based in Europe.

The airline industry has been a major factor in the globalization of the world economy. It connects the sellers and the buyers as well as transports goods across countries. It also breaks the time and distance barriers. In the past, air travel was considered a luxury but it is now a common necessity.

Cooperation within alliances poses several challenges to managers: the size of the alliance, the need to intensify cooperation and the harmonization and standardization of common processes, and the search for synergies to reduce costs. However, in times of crisis, alliances do not necessarily prevent stiff competition between the partners. At present, five alliances – One World, Star, Wings, Sky Team and Qualiflyer stand out as the core groupings around which other airlines with strong regional networks will come together to form worldwide networks and can be described as global alliances. But they remain fragile creations subject to competing attractions and economic forces. Over the years, several companies have switched from one alliance to another. Austrian Airlines, for example, moved from the Qualiflyer to the Star alliance. Air France has recently floated the idea of creating a Mediterranean alliance with Alitalia and Iberia. To make this three-way deal possible, Iberia would have to leave the OneWorld alliance.

The airline business is an industry that is competitive and unique, focussing on consumer choice and the responsiveness of airlines to changes in the external business environment. For any airline, this environment can be very complex as it is ‘hard for them to fully understand and impossible for them to fully control’ (The Times, n.d. p1). Virgin Atlantic is an international airline that is based in the UK. It was started by the entrepreneur Richard Branson in 1982 and now flies to 30 destinations around the world (Virgin Atlantic Airways Ltd, 2011). By looking at

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

Market structure can be defined as patterns of behaviour by enterprises in an effort to adjust to the markets in which they operate (buy or sell). Pricing strategies and collusive behaviour mergers are a few dimensions of market conduct. It is the industry norm for a legacy carrier to offer service to most popular destinations; Delta reducing routes to a similar schedule as the low-cost airlines is not an option in the multi-billion dollar industry. In order to gain market share from low-cost airlines, Delta must create a value proposition that differentiates itself from its competitors. Many customers will pay a premium if the level of service provided is higher than the low-cost, no-frills

Aircraft industry has only small suppliers while the customers are all over the world. As above mentioned the industry requires large complex cooperate alliances in its hierarchy, only few countries having high tech industry basis are able to

The airline industry can be considered an imperfect oligopoly. There are several large carriers that dominate long distance flights, and many small carriers that compete for short distance flights. Competition is fierce, and the return for most carriers is very low. Some airlines are trying to differentiate themselves, like JetBlue for example, by offering superior services at low prices. Other low cost airlines, like Southwest, offer low costs with no frills. Most airlines offer a frequent flyer programs in order to develop brand loyalty. In recent years there has also been several alliances formed between airlines. These alliances enable

first it should be underlined, that in the airline industry, there are two types of buyers (Hartley, 2013). The first type is the individual buyers, who buy tickets for personal or business reasons, related to their own individual well beings. This type of buyers is extremely diverse and there is barely someone who had never bought a ticket, especially in the developed countries. A plane ticked could be purchased directly from the airline company’s ticket offices or from the second group of buyers, e.g. travel agencies and online portals. This buyer group works as a middle man between airlines and flyers. They work with many airline companies to give consumers the best possible flight. Between these two groups there is definitely a large amount of buyers compared to the number of firms. There is low cost shifting between companies because many people choose flights based on where they are going and costs at the time. This is a loyalty to the companies, but not enough high switching costs. Each client needs a lot of important information. They need

In less than twenty years, the global industry has gone through tremendous change. Several airlines had gone out of business that had been on top of the industry for years. One of the remarkable changes had been airline alliances. The case focuses on the airline industry and how airlines are forming alliances and joint ventures. It then introduces the partner firms Air France KLM , and Delta . Air France KLM had over 25 collaborative agreements with other carriers and was a founding member of Skyteam, one of the leading airline groups. Air France KLM and Delta Airlines formed revenue

In the past few years, the commercial air carriers have formed strategic alliances with each other which were not possible before this due to the previous regulations.