Gulf carriers against the trend? A conceptual framework of motivations and downsides related to joining multi-partner alliances in the airline industry
Loading...
URL
Journal Title
Journal ISSN
Volume Title
School of Business |
Master's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.
Authors
Date
2016
Department
Major/Subject
Mcode
Degree programme
Management and International Business (MIB)
Language
en
Pages
80
Series
Abstract
Close to two-thirds of the global passenger air traffic is handled by the three global airline allianc- es: Star Alliance, OneWorld, and SkyTeam. The residual traffic is handled by non-aligned carriers, including two of the most successful airlines of recent years: the gulf carriers Etihad Airways and Emirates. Both airlines are very fastidious in terms of partner selection and voice several concerns in regards to global airline alliances. Considering the importance and success of these alliances in the aviation industry, these positions seem paradox. Several studies exist that summarize motiva- tions and downsides of joining an alliance, but, at the same time, the literature is lacking a system- ic synthesis of perceived benefits and perils. This study contributes to existing literature by generating a summary of the extensive body of knowledge on strategic alliances and synthesizing its perspectives on the motivations and down- sides of allying; a domain that has not been addressed previously. In addition, the analysis has not only yielded insights to the different motivations and downsides of joining an alliance, but also to the theoretical lenses most commonly used when analyzing the motives and downsides. Moreover, a step further is taken to evaluate the applicability of this literature and its insights concerning the motivations and downsides of allying to the specific context of aviation. Based on theoretical in- sights and an empirical case study of the gulf carriers, propositions concerning the criteria that influence the company-specific decision related to allying and factors influencing the design/ structure and outcome of the cooperation are developed. Multiple sources of evidence are used in the case study, such as interview transcripts, reports from leading industry magazines, newspaper articles, and the annual reports of the companies involved. The multiple-case study suggests that the risk of partner dependency and management specific views are important factors for the gulf carriers and influence the decision to (not) join an alliance. While prior literature gives little indication, which factors specifically influence the airline’s per- ception of motivations and downsides in the aviation industry, this study hypothesizes several un- derlying factors for the alliance decision, namely: the airline cost structure, network structure, target passenger group, alliance type, alliance governance, and partner characteristics. The study also provides some practical insights for management: the most likely scenario of the further evolvement of the airline industry seems to be a slow, but steady, deregulation of the industry, while joint venturing and closer collaboration becomes increasingly important. The study proposes that it is important for management in the airline business to closely observe the developments and assess the increasingly feasible option to joint venture, which was not available when the glob- al airline alliances were founded.Description
Thesis advisor
Nissilä, HeliKeywords
strategic alliances, multilateral alliances, multi-partner alliances, cooperation, motivations, motives, downsides, aviation