Strategic alliances in the world airline industry

In recent years the airline industry has been in turmoil. Declining loads, overcapacity and a reduction in prices in real terms has resulted in massive financial losses. At the same time, the industry has been undergoing change engendered by, among others, deregulation and privatisation. Combined, such pressures have led to airlines forming alliances. This paper addresses the benefits and pitfalls. To illustrate these points a case study of British Airways is introduced. The paper concludes by speculating on the impact such alliances are having on the airline industry. © 1997 John Wiley & Sons, Ltd.