“Companies are just beginning to learn what nations have always known: in a complex, uncertain world filled with dangerous opponents, it is best not to go it alone” (Ohmae, 1989, p. 143). This statement emphasises the significant developments in firms’ corporate strategy in the 1980s. As a response to the rise of globalisation, and thus, increased competition, companies throughout the world started collaborating with partners with interfirm cooperation. Their cooperative practices, though, were not equally relevant in all branches, but concentrated mainly on industries that were affected most by the in-creasing environmental dynamic and complexity. Therefore, firms in various industries, such as the automotive or telecommunication industry, established alliances with their competitors in order to stay competitive and to jointly expand into world markets. However, the aviation industry, in particular, has experienced downright alliance frenzy since that time. With the gradual liberalisation of international air transport, collabora-tions between carriers have steadily gained importance. Therefore, airline alliances have developed from purely horizontal links into more complex and integrated strategic alliances. These strategic alliances have been established mainly to bypass existing regula-tory restrictions and to adapt to customers' altered preferences by extending the airlines’ networks. However, with the incidents that occurred during the first years of the 21st century, such as the terrorist acts of 9/11, partner airlines were forced to react to the changed external conditions. This development highlights the high dependence of air-lines and their strategic behaviour on the external environment. Therefore, this thesis aims to analyse the external conditions that persuaded the airlines to align in complex strategic alliances, and how these factors influenced their objectives. Furthermore, the thesis reveals the extent to which the changes in the external environ-ment have induced a reorientation in the airlines’ alliance strategy.
Table of Contents
1 Introduction
1.1 Problem Definition and Objectives
1.2 Course of the Investigation
2 Inter-firm Cooperation and Strategic Alliances
2.1 Strategic Alliances as a Special Form of Cooperation
2.1.1 Attributes of Inter-firm Cooperation
2.1.2 Specific Characteristics of Strategic Alliances
2.2 Classification of Strategic Alliances
2.3 Objectives of Strategic Alliances
3 Development of the Aviation Industry
3.1 Characteristics of the Airline Business
3.2 Historical Development of the Airline Industry
3.2.1 The Phase of Regulation
3.2.2 Domestic Deregulation and Liberalised Markets
3.3 Current Status of the Airline Industry
3.3.1 The Way to a Trans-Atlantic Common Aviation Area
3.3.2 Period of Crises and Growing Low-Fare Competition
4 Emergence of Strategic Alliances in the Airline Industry
4.1 Airline Alliances: Background Information
4.1.1 Marketing versus Strategic Airline Alliances
4.1.2 Areas of Cooperation in Airlines Alliances
4.2 From Interline Agreements to Global Airline Alliances
4.3 Motivation for Strategic Alliances Formation between Airlines
4.3.1 Analysis of the External Environment in the mid-1990s
4.3.2 Motives and Objectives of Strategic Airline Alliances
5 Current Developments of Strategic Airline Alliances
5.1 Strategic Alliances between Airlines in the 21st Century
5.1.1 Analysis of the Current External Environment
5.1.2 Change of Focus of Strategic Airline Alliances
5.1.3 The Key Question - To Join or not to Join Strategic Alliances?
5.1.3.1 Motives for Joining - The Case of Turkish Airlines
5.1.3.2 Motives for not Joining - The Case of Emirates Airlines
5.2 Alliances versus Mergers - The Question for the Future
6 Conclusion
Objective and Research Focus
This thesis examines the evolution of strategic alliances in the aviation industry, analyzing how external environmental factors have dictated the shift from simple inter-airline cooperation to complex, integrated global alliances. The research explores the changing objectives of these alliances, moving from revenue generation through network expansion toward cost-efficiency and joint ventures in the 21st century.
- The impact of deregulation and liberalisation on airline competition.
- The strategic differentiation between marketing alliances and strategic airline alliances.
- Macro-environmental drivers (PEST analysis) influencing airline alliance formation in the mid-1990s and the 21st century.
- Case studies on the strategic rationales for joining (Turkish Airlines) or remaining independent (Emirates Airlines).
- The future viability of strategic alliances versus full corporate mergers.
Excerpt from the Book
A strategic alliance is one where the partners co-mingle their assets in order to pursue a single or joint set of business objectives. Co-mingled assets may be terminal facilities, maintenance bases, aircraft, staff, traffic rights or capital resources. If two or more airlines offer a common brand and a uniform service standard, then they are co-mingling their assets and have moved into a strategic alliance (Doganis, 2006, p. 79).
When collaborating in a strategic alliance, the cooperative agreement between the airlines usually comprises the majority of the joint activities performed in a marketing alliance, beside the additional areas of cooperation, such as joint advertising or joint purchasing (see Figure 2). Therefore, while the scope of joint activities which require higher commitment and thus the degree of integration rise, the potential to achieve greater profitability and to decrease costs is given (Iatrou & Oretti, 2007, p. 75).
Strategic airline alliances are, moreover, characterised by exclusive membership as well as a joint marketing entity (Iatrou & Oretti, 2007, pp. 75). Hence, although it is often possible to adhere to marketing alliances with airlines which are not part of the same strategic alliance, carriers are not permitted to be members of two strategic alliances at the same time. These strategic alliances, however, have to represent a joint marketing concept which facilitates a shared promotion of the airlines’ products (Iatrou & Oretti, 2007, p. 76).
Summary of Chapters
1 Introduction: Introduces the research problem, objective, and the course of the investigation regarding strategic alliances in the aviation industry.
2 Inter-firm Cooperation and Strategic Alliances: Defines the theoretical framework and characteristics of inter-firm cooperation and strategic alliances.
3 Development of the Aviation Industry: Analyzes the historical and current status of the airline industry, including the impact of regulation and deregulation.
4 Emergence of Strategic Alliances in the Airline Industry: Examines the transition from simple interline agreements to complex alliances driven by the external environment in the mid-1990s.
5 Current Developments of Strategic Airline Alliances: Explores the 21st-century shift toward cost-efficiency, the formation of joint ventures, and specific case studies like Turkish Airlines and Emirates.
6 Conclusion: Summarizes the thesis findings, confirming the three-stage evolution of airline alliances and their coexistence with future merger trends.
Keywords
Strategic Alliances, Aviation Industry, Airline Cooperation, Global Alliances, Deregulation, PEST Analysis, SWOT Analysis, Revenue Enhancement, Cost Efficiency, Joint Ventures, Network Expansion, Open Skies, Turkish Airlines, Emirates Airlines, Airline Strategy.
Frequently Asked Questions
What is the core focus of this thesis?
This work explores the development and strategic evolution of airline alliances, investigating how environmental factors have shaped the way carriers collaborate to maintain competitiveness.
What are the primary themes discussed?
The study centers on the transformation of airline cooperation from tactical marketing links into complex, long-term strategic alliances, and the subsequent move toward cost-efficiency and joint ventures.
What is the main research objective?
The primary aim is to analyze the external conditions—such as regulatory frameworks and economic fluctuations—that have persuaded airlines to enter into strategic alliances and how these factors have induced reorientations in their alliance strategies.
Which scientific methodology is used?
The thesis utilizes a qualitative approach, employing PEST (Political, Economic, Social, Technological) analysis for environmental scanning and SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for specific airline case studies.
What topics are covered in the main body?
The main body covers the definition of alliances, the historical development of the aviation market, the emergence and maturation of global alliances, and the strategic rationale for joining or remaining outside of these alliances.
Which keywords best characterize this research?
Key terms include Strategic Alliances, Aviation Industry, PEST/SWOT analysis, Joint Ventures, and airline cost/revenue strategy.
Why did Turkish Airlines decide to join Star Alliance?
Turkish Airlines sought to gain access to a global network, improve its international brand awareness, and utilize reciprocal Frequent Flyer Programmes to overcome the competitive disadvantages of being a medium-sized, regional carrier.
Why has Emirates Airlines remained unaligned?
Emirates relies on its independent success, low-cost structure, and strong brand; it fears that joining a global alliance would dilute its brand, limit its operational sovereignty, and conflict with its role as a global transit hub in Dubai.
How do current strategic alliances differ from those formed in the 1990s?
While 1990s alliances focused heavily on revenue growth through network expansion, current alliances have shifted focus toward cost-efficiency, joint procurement, and deep integration via joint ventures to combat rising costs and yield erosion.
- Citation du texte
- Hendrik Vedder (Auteur), 2008, Strategic Alliances in the Aviation Industry, Munich, GRIN Verlag, https://www.grin.com/document/119312
