Strategic Alliances Among International Airlines And Their Implications For Organisational Change

Abstract

Globalisation is an inevitable path for many types of organisations as they strive to attain and defend competitive advantage and strategic alliances are a necessary part of this process. Cooperative behaviour and simultaneous competition in several continental markets is not a new phenomenon in aviation, but the current popularity of alliances among the major carriers has been interpreted as a form of globalisation. A common assumption is that these alliances present ways for the airlines to circumvent the restrictions present in the regulatory framework. This paper argues that globalisation, as it is more widely understood in modern management, involves much more than the development of an all-encompassing network. Exploitation of the benefits of globalisation requires a change in thinking about the relationships within and between organisations. Strategic alliances have many advantages over mergers and acquisitions in this context. The paper argues that most of the current airline alliances are “hollow organisation”, but that genuine strategic alliances are likely to be formed in more competitive conditions. These genuine strategic alliances can deliver benefits to the industry and its customers, but policy makers must recognise the growing complexity of new forms of organisation in the airline industry.