Distinct features of lasting and non-lasting airline alliances

Abstract

This paper seeks to uncover key differences between lasting and discontinued airline alliances by applying factor analysis. Several meaningful patterns emerge. First, alliances aiming at customer loyalty and operations integration are more likely to be long lasting. Second, bilateral code-sharing with serious financial tie-up through pooling agreement on revenue/costs is another distinct feature of lasting alliances. Third, the leading cause for alliance termination is expansion into non-core and non-customer-oriented activities. Finally, alliances engaging solely in code-sharing, joint operations, or joint marketing without other substantial commitment are likely to fail or only be short term. The paper concludes with a validation of key findings using logistic regression.