1. The scheduled Airline Industry :
Partnership and Globalization

2. MERGER AND ALLIANCES

3. ALLIANCES :
When two or more airlines come together and pull their resources an airline alliance is formed

4. Advantages of airlines alliances for airlines
Increased market reach
Cost control
More efficient supply of capacity
Traffic feed
Economies of marketing
Technical advantages
Shared CRSs

5. Motivations for airline alliances
Access to benefit of another firm’s asset
Reduced risk by sharing it
Defence of current markets
Trend towards globalization
Survival

6. Code - sharing
Code-sharing occur when one airline allows another to use its designator code, enabling the same service to be offered by more than one airline

7. Block seat arrangements
Blocked space agreements are an extension of code-sharing concept whereby an airline leases a block of seats on the services of another airline on route it does not operate itself.

8. Wet-leasing
Wet-leasing occurs when an aircraft is leased yet the crew, fuel and maintenance are all provided by the aircraft’s owner

9. MERGERS:
Mergers involve one airline in taking an equity stake in another airline.

10. Example of Mergers:
In the UK, BA was formed through the merger, in the early 1970s, of the following two state carriers: British European Airways and British Overseas Airways Corporation.
In the USA, important mergers included those of Northwest with Republic and TWA with Ozark

11. Globalization
What globalization means in an industry in which many of the major international airlines already service numerous destinations in the following way:

12. The ‘global airline’ seeks to supply its services in any world market where it sees an opportunity for profitable expansion.
The objective of globalization is to improve competitive opportunities, to maximize new business openings, to enhance growth and to increase profitability.

13. Global Grouping
The emergence of global groupings and the rise of the so-called mega-carrier are topical aspects of industry

14. Meaning of the global groupings
Global groupings are about airline partnerships, they use the illustration of European, Asian and American companies’ attempt to consolidate their networks by entering into commercial agreements.
The original alliances were mainly between two airlines.

15. LOW-COST CARRIERS
Low cost carriers have had significant impact by lessening the distinction between scheduled and charter airline.

16. Indicative features of low cost carriers LCC = Low Cost Carrier, FFP =Frequent Flyer Programme, CRS= Computer Reservations System
Direct distribution
Ticketless travel
Interline agreements
Removal of the “ added value ”
Simplified pricing structure
Reduced service and entertainment level
One-class travel

17. Continued...
High-load factors
Fewer booking restrictions
Aircraft safety and comfort
Lease v. buy
departure points
Reduced labour