Airline Alliance
An airline alliance is an agreement between two or more airlines to cooperate on a substantial level. The three largest alliances are the Star Alliance, SkyTeam and Oneworld. Alliances also form between cargo airlines, such as that of WOW Alliance, SkyTeam Cargo and ANA/UPS Alliance. Alliances provide a network of connectivity and convenience for international passengers and international packages.
Benefits and costs
Benefits can consist of:
An extended and optimized network: this is often realised through code sharing agreements. Many alliances started as only a code sharing network.
Cost reduction from sharing of:
Sales offices
Maintenance facilities
Operational facilities, e.g. catering or computer systems.
Operational staff, e.g. ground handling personnel, at check-in and boarding desks.
Investments and purchases, e.g. in order to negotiate extra volume discounts.
Traveler benefits can include:
Lower prices due to lowered operational costs for a given route.
More departure times to choose from on a given route.
More destinations within easy reach.
Shorter travel times as a result of optimised transfers.
A wider range of airport lounges shared with alliance members
Faster mileage rewards by earning miles for a single account on several different carriers.
Round-the-world tickets, enabling travelers to fly over the world for a relatively low price.
Airline alliances may also create disadvantages for the traveler, such as:
Higher prices when all competition is erased on a certain route.
Less frequent flights, for instance when two airlines fly each three times a day on a given route, the alliance might fly only four times on the same route (this might be especially true between cities that are hubs for each airline, e.g., flights between Detroit, where Northwest has a fortress hub, and Amsterdam, where KLM has a fortress hub).
[edit] Hurdles
The ability of an airline to join an alliance is often restricted by laws and
Benefits and costs
Benefits can consist of:
An extended and optimized network: this is often realised through code sharing agreements. Many alliances started as only a code sharing network.
Cost reduction from sharing of:
Sales offices
Maintenance facilities
Operational facilities, e.g. catering or computer systems.
Operational staff, e.g. ground handling personnel, at check-in and boarding desks.
Investments and purchases, e.g. in order to negotiate extra volume discounts.
Traveler benefits can include:
Lower prices due to lowered operational costs for a given route.
More departure times to choose from on a given route.
More destinations within easy reach.
Shorter travel times as a result of optimised transfers.
A wider range of airport lounges shared with alliance members
Faster mileage rewards by earning miles for a single account on several different carriers.
Round-the-world tickets, enabling travelers to fly over the world for a relatively low price.
Airline alliances may also create disadvantages for the traveler, such as:
Higher prices when all competition is erased on a certain route.
Less frequent flights, for instance when two airlines fly each three times a day on a given route, the alliance might fly only four times on the same route (this might be especially true between cities that are hubs for each airline, e.g., flights between Detroit, where Northwest has a fortress hub, and Amsterdam, where KLM has a fortress hub).
[edit] Hurdles
The ability of an airline to join an alliance is often restricted by laws and