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Distinct features of lasting and non-lasting airline alliances

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  • Li, Michael Z.F.

Abstract

This paper seeks to uncover key differences between lasting and discontinued airline alliances by applying factor analysis. Several meaningful patterns emerge. First, alliances aiming at customer loyalty and operations integration are more likely to be long lasting. Second, bilateral code-sharing with serious financial tie-up through pooling agreement on revenue/costs is another distinct feature of lasting alliances. Third, the leading cause for alliance termination is expansion into non-core and non-customer-oriented activities. Finally, alliances engaging solely in code-sharing, joint operations, or joint marketing without other substantial commitment are likely to fail or only be short term. The paper concludes with a validation of key findings using logistic regression.

Suggested Citation

  • Li, Michael Z.F., 2000. "Distinct features of lasting and non-lasting airline alliances," Journal of Air Transport Management, Elsevier, vol. 6(2), pages 65-73.
    • Handle: RePEc:eee:jaitra:v:6:y:2000:i:2:p:65-73
    DOI: 10.1016/S0969-6997(99)00024-1
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    References listed on IDEAS

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    1. Park, Jong-Hun, 1997. "The effects of airline alliances on markets and economic welfare," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 33(3), pages 181-195, September.
    2. Youssef, Waleed & Hansen, Mark, 1994. "Consequences of strategic alliances between international airlines: The case of Swissair and SAS," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(5), pages 415-431, September.
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    Cited by:

    1. Goh, Kevin & Uncles, Mark, 2003. "The benefits of airline global alliances: an empirical assessment of the perceptions of business travelers," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(6), pages 479-497, July.
    2. Wen, Yuh-Horng & Hsu, Chaug-Ing, 2006. "Interactive multiobjective programming in airline network design for international airline code-share alliance," European Journal of Operational Research, Elsevier, vol. 174(1), pages 404-426, October.
    3. Goh, Mark & Yong, Jongsay, 2006. "Impacts of code-share alliances on airline cost structure: A truncated third-order translog estimation," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 835-866, July.
    4. Min, Hokey & Joo, Seong-Jong, 2016. "A comparative performance analysis of airline strategic alliances using data envelopment analysis," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 99-110.
    5. Weber, Karin & Sparks, Beverley, 2004. "Consumer attributions and behavioral responses to service failures in strategic airline alliance settings," Journal of Air Transport Management, Elsevier, vol. 10(5), pages 361-367.
    6. Forsyth, Peter & Niemeier, Hans-Martin & Wolf, Hartmut, 2011. "Airport alliances and mergers – Structural change in the airport industry?," Journal of Air Transport Management, Elsevier, vol. 17(1), pages 49-56.

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