Why would large airlines want to join alliances such as One World, Star, or Sky Team? What are the potential advantages and disadvantages?
The main reason why large carriers want to join alliances is because it helps them to: increase their competitive position. These primary advantages are what have been fueling the push for a number of airlines to embrace this model. The way this improves their operations, is to reduce the total amounts of competition on different routes. This enables one carrier (who is the most profitable) to offer these services to consumers. These alliances help all airlines to benefit from this arrangement by reducing costs and competition on key routes. (Hauptman, 2008) (Wensveen, 2011)
The biggest disadvantages are that these organizations could form a trust. This is when the airlines will use strategic alliances in order to increase fares. When this happens, it means that there will...
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