Airline Strategic Alliances
One among very many Global Strategic Alliances I have always been fascinated by, is the Airlines Partnerships. Originally conceived as a small-scale cooperation agreement made among very few airlines, alliances have grown into huger and more ambitious projects, becoming the world’s biggest one, in my opinion.
Current three major airline alliances (One World, Sky Team and Star Alliance) bring together many airlines to offer passengers worldwide travel experience. Motivations and benefits they obtain through Global and Cross-Border Alliances are very interesting to me, just to mention a few:
- Saving costs
- Increasing traffic / revenue per seat mile
- taking advantage of synergies
- providing marketing branding to facilitate travelers making inter-airline code-share connections within countries
and the list goes on.
Effective global alliance can be among the best mechanisms to implement strategies in global markets. In a highly competitive environment, alliances present a faster and less risky route to globalization.
Certainly many difficulties arise in cross-border alliances in melding the national and corporate cultures of the parties, in overcoming, language and communication barriers (something I treated in my article “Communication, and the World of Communication“, and in building trust between the parties over how to share management processes.
Guidelines of the Alliances
It is also interesting to understand the guidelines that the alliances take into consideration to minimize potential problems, such as:
- Seeking alliances where complementary skills, products and markets will result
- Choosing/accepting a partner with compatible strategic goals and objectives and with whom the alliance will result in synergies through the combined technologies, markets, and management cadre
- Working out with partner how to deal with proprietary technology or competitively sensitive information and how to share them
- Recognizing that alliances could last some years and new ones can be created
As far as point 4, it was my opinion these alliances did not have a limited life expectancy as many thought, now I am eager to see other tangible benefits they will be delivering to their passengers.
by Severino Ricci
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