International airline alliances An analysis of code-sharing's impact on airlines and consumers

Timothy F Hannegan and Francis P Mulvey

Journal of Air Transport Management, 1995, vol. 2, issue 2, 131-137

Abstract: From January 1992 to June 1995, the number of code-sharing alliances between US and foreign airlines more than tripled, increasing from 19 to 65. This paper examines the impacts of these alliances on airlines and consumers and is drawn largely from our recent report on code-sharing.11The views expressed in this paper are those of the authors and do not necessarily represent the views of the US General Accounting Office (GAO). However, this article is based largely on our recent report International Aviation: Airline Alliances Produce Benefits, but Effect on Competition is Uncertain (GAO/RCED-95-99, 6 Apr: 1995). Our analysis shows that code-sharing alliances can generate large gains for airline partners in terms of added passengers and revenues. Besides the overall scope of a code-sharing arrangement, we found a critical ingredient for successful alliances to be the degree of integration achieved by the airlines in operations and marketing. In addition, the paper describes how the gains achieved through alliances are largely zero-sum in that they come at the expense of competing airlines. However, it is likely that at least some of the gains come from new traffic stimulated by increased competition among alliances and between alliances and other airlines, although little data exist to confirm this hypothesis. Finally, this paper outlines the consumer benefits — such as reduced layover times — that alliances provide, but emphasizes that with respect to fares, insufficient data exist for analysis.

Keywords: airline alliances; code-sharing; international aviation (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:2:y:1995:i:2:p:131-137

DOI: 10.1016/0969-6997(95)00029-1

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