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International Handbook on the Economics of Tourism

Edited by Larry Dwyer and Peter Forsyth

This highly accessible and comprehensive Handbook presents a cutting edge discussion of the state of tourism economics and its likely directions in future research. Leading researchers in the field explore a wide range of topics including: demand and forecasting, supply, transport, taxation and infrastructure, evaluation and application for policy-making. Each chapter includes a discussion of its relevance and importance to the tourism economics literature, an overview of its main contributions and themes, a critical evaluation of existing literature and an outline of issues for further conceptual and applied research.
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Chapter 9: Airline Alliances and Tourism

Clive L. Morley


Clive L. Morley Importance of airline alliances Alliances among international airlines, involving high levels of cooperation and coordination of services and operations, have become a prominent feature of the airline industry in recent times. The trend started with alliances between European and North American airlines, extending to Asian airlines and subsequently to include African and Latin American airlines. Figure 9.1 shows the growth trend in the number of alliances and the number of airlines involved in alliances. These trends are continuing: for example, Air China is considering joining one of the major alliances (Xinhua News Agency 2003) and US Airways is joining Star Alliance. Most of the alliances take the form of code sharing of services by two airlines, in which one airline agrees to buy a block of seats on a flight service of another airline and then sells these seats under its own brand (the flight typically appears with both airlines’ codes). But some involve greater degrees of cooperation such as recognition of each other’s frequent flyer schemes, sharing of lounges and terminals, joint marketing and integration of booking systems. Alliances can include a degree of equity ownership (for example, British Airways part ownership of Qantas, both members of the Oneworld alliance), but usually do not. Indeed, equity positions do not necessarily translate into common alliance membership (for example, Singapore Airlines has a 49 per cent stake in Virgin Atlantic, but while Singapore Airlines is a member of Star Alliance, Virgin Atlantic remains independent). Notably, five major alliances...

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