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Airline alliances & low-cost airlines : the two opposite powers of the contemporary airline industry

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Airline alliances & low-cost airlines : the two opposite powers of the contemporary airline industry

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Samenvatting

The airline industry is a subject that is often reported in the media these days. Especially in the last years, a lot of mergers and accessions to alliance have taken place. What is more, a strong
competition of low-cost carriers is going on in which cheaper fares are offered with less service on board. The aim of this paper is to analyse to what extent it is advantageous to join an airline
alliance and to examine what differences exist between these regular airlines and low-cost airlines.
In the first chapter, the main reasons for the admission of an airline to an alliance are given. Besides, an evolution of airline alliances is given, also stating the alliances that are currently active in the airline market. Furthermore, various types of alliances will be explained. It can be concluded that three alliances currently dominate the alliance market. Besides, it can be said that various
types of alliances exists. These types vary from simple agreements to intensive cooperation's.
The second part focuses on the advantages to join an alliance. This chapter is divided into two parts. First, the benefits for the airline company are discussed. Second, the benefits for the
customers are argued. It can be concluded that saving costs by cost sharing and increased passenger traffic are the main advantages for airline companies. Besides, it can be said that an extended network with many route possibilities and seamless connections are the most important advantages for customers.
In the third chapter, a comparison between 'full-service' allied airlines and low-cost carriers is given. It can be concluded that a considerable number of differences are seen in various fields, such as in fare management and in communication management. Besides, big contrasts are observed in airline operations, like in airport choice and catering service on board. However, it is also seen that there are a couple of similarities between the two types, for example, in terms of fuel procurement and safety.
The last part focuses on the evolution in terms of passenger traffic and on the future of both types of airlines. As for the evolution of passenger traffic, it is seen that 'die-hard' low-cost
carriers are better able to maintain passenger growth these days than regular carriers, even in the event of a financial crisis. One of the current trends that can be observed in the airline industry is
consolidation between airlines. As the future of the airline industry is concerned, it can be said that airline alliances will be more heterogeneous in the future. That is to say, focussing more on local
markets by including local feeders in their alliance. Consequently, more smaller airports will be served and itinerary possibilities for customers are extended. Moreover, it is seen that a more
exclusive network will be important in the future in order to offer destinations that other alliance do not offer. It can also be concluded that 'die-hard' low-cost airlines will not offer full service.

Toon meer
OrganisatieDe Haagse Hogeschool
AfdelingESC Europese Studies / European Studies
Jaar2011
TypeBachelorscriptie
TaalEngels

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