Discussion Surrounding Global Alliances Operating in the Airline Industry

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The international aviation industry is arguably one of the most competitive and cut-throat businesses in the world today. Characterised by high revenue but notoriously thin profit margins, modern international airlines are constantly searching for methods to gain advantages over their competitors and attract new customers. One of these methods which has become popular since the late 1990s is that of the global airline alliance. Today there are three major alliances in operation, each containing different member airlines. These alliances offer airline customers various advantages over travel with a traditional carrier. Nevertheless, these advantages have been criticised by some as being anti-competitive, there are several examples of airlines that prefer to remain unaligned, and have become extremely successful. Who are these alliances, why are they so popular, and why are they so strongly criticised by some?

The Star Alliance was founded in May 1997 by five airlines from three different continents, and today is the largest and oldest of the three major alliances in operation today. It features the highest number of member airlines of any alliance, and also the greatest number of flights and destinations served (Star Alliance, 2011). It is also independently rated by Skytrax (2011) as the world’s best airline alliance, having additionally won the award every year it has been presented except for 2010, when the award went to Oneworld. Furthermore, the Star Alliance is probably the most useful for New Zealand based frequent fliers, as New Zealand’s principal airline, Air New Zealand is a member. Air New Zealand frequent fliers are able to take maximum advantage of co-ordinated scheduling, frequent flier points, and international lo...

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O’Sullivan, M. (2010, September 17). Virgin hints at signing up to Skyteam. The Sydney Morning Herald, p. Business 3.

Oneworld. (2011). An introduction to Oneworld: The alliance that revolves around you. Retrieved 17 September 2011 from http://www.oneworld.com/content/factsheet/W1_2011-01%20Introduction%20to%20oneworld.pdf

Rodrigue, JP. (2005). Market share of world airline traffic. Retrieved 18 September 2011 from http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/airalliances.html

Skytrax. (2011). World Airline Awards. Retrieved 17 September 2011 from http://www.worldairlineawards.com/Awards_2011/alliance2011.htm

Star Alliance. (2011). Star Alliance: About. Retrieved 17 September 2011 from http://www.staralliance.com/en/about/

United Airlines. (2011). Star Alliance. Retrieved 18 September 2011 from http://www.united.com/page/article/0,6867,1519,00.html

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