Airline Choices for the Future by Kostas Iatrou

By Kostas Iatrou

"Airline offerings for the longer term: From Alliances to Mergers" bargains an updated evaluation of the because it stands at the present time, offering a finished perception into how the realm of airline alliances is altering, and the way the merger phenomenon is probably going to slot into the hot situation. the aim of this ebook is twofold. to begin with, it outlines the evolution and the explanations at the back of alliances among overseas schedule carriers, the alliances' song documents and how they've got affected airways and the air shipping undefined. Secondly, drawing on earlier and newer advancements within the undefined, it examines the stories airways all in favour of cross-border mergers have undergone and the benefits and problems they've got stumble upon. Alliances and mergers are offered from either the airline and the shopper point of view. The booklet presents a balanced account of the place mergers and alliances have taken the to this point, bridging the space among merger conception and applied practices and methods. It additionally identifies the demanding situations alliances and cross-border mergers have confronted and highlights the foremost forces affecting airline improvement. Theoretical proof is supplemented through facts accumulated through surveys and interviews with airline executives, aviation specialists, experts and regulatory our bodies.

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Extra resources for Airline Choices for the Future

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17 Another issue that airlines and alliances will have to deal with are the developments in aircraft technology. Large aircraft such as the Airbus A380, destined to be used on international high-density routes, will expand capacity and reduce costs by raising the overall number of passengers per flight. At the same time, new smaller aircraft such as Airbus A350s and Boeing 787s will allow competing alliances or merged airlines to provide direct services on long distance, thin city pairs such as San Francisco and Copenhagen or Hong Kong and Oslo.

It seems futuristic but plausible that low-cost carriers may start feeding part of their traffic to long-haul markets, possibly entering into partnerships with ‘traditional carriers’ (Bilotkach, 2005). LCCs are expected to penetrate air transport markets further, expanding their geographic scope/reach and service offering. And established carriers will find it more and more difficult to cross-subsidise their loss-making traffic flows with profits earned in the protected markets left to them, such as intercontinental routes.

However, a decade of alliance cooperation has shown that while alliances may have succeeded in increasing traffic and expanding networks they do not seem to have scored highly in the area of cost reduction and operational synergies. Perhaps the main reason they have fallen short of the mark is due, as Chris Tarry believes, to a reluctance of small carriers to integrate, because of fears that becoming too dependent on alliances is tantamount to being bought out. The attractiveness of mergers lies precisely in the promise they hold, that is to deliver the efficiency that may result from commercially powerful and financially viable airlines as well as from a far more competitive and supple global airline industry.

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