Gaining a Competitive Edge through Airline Alliances
Airlines always pursue the best way to be more efficient and safety to service their clients for snatch competitive advantages and greatest benefits especially for global civil aviation markets. Therefore many international airlines move into new phases of economic agreements in order to gain competitive advantages and revenues. In general, airline used the alliances and code sharing as the most common business models. However, airlines alliances are profound and have been constrained by some international, inter-alliances and internal alliances conflicts of benefits. For this reason, my research paper is researching into the obstacles of airline alliances by internal and external view. Based on my research requirement, I need refer some articles about the definition, advantage, situation, effect, and benefit of airline alliances .Thus I adopt the article “Gaining a Competitive Edge through Airline Alliances” as my critical review article.
In Stephan Vander Kraats’s article “Gaining a Competitive Edge through Airline Alliances,” he stated that alliances and cods sharing are popular among airlines and helping the airline gaining the competitive advantages. According to his article, “alliance is a merging of resources, operations, or financial interests between one entity and another entity.” In other words, alliance is an agreement between two or more airlines to cooperate for the foreseeable future on a substantial level. Generally speaking, the degree of cooperation differs between alliances. As regards Code sharing, it is “marketing arrangement that permits a carrier to sell service under its name and airline designator code when the service is provided in whole or part by another air carrier.” Most airlines want to expand market and entry the new market segments, or to eliminate competition, hence airlines enter alliances and code sharing agreements. Because alliances and code sharing are paths for airline expand its flight network without huge investments. In addition, there have some barriers to entry in airline industry such as financial barrier and priority obstacles. It is mean that major airlines have exclusive-use gate leases, hold best take off and landing time or slots, who dominate the best and desirable airports. New and small airline are difficult to entry in this high profit routes. As a result, most small airlines can eliminate these obstacles depend on alliances and code sharing. Indeed, alliances and code sharing agreements create a variety of benefits to both airlines and society. For example, the employee job security of airlines, efficiency of passenger’s flight connections, revenues of airlines are greatly increased. Nevertheless, alliances and code sharing agreements induce some critics and problems. Government and some people seem to think that airline industry will become to anticompetitive market which cause Mega-carriers due to alliances agreements. As a consequence, perhaps others airlines and new airline can’t entry and mega-carriers enormous economical force to restrain trade and increase pricing. Besides, He stated that there is currently Insufficient data to determine whether good or bad in competition and fares. At final, author claimed that although alliances and code sharing agreements have some obstacles need to result, they represent critical and important sources of new traffic and revenues.
This article had effectively answer possible objections at the correct vocabulary level because it belongs in journal paper from Competitive Review. Although this paper had a little outdated, I think it is worth to refer this article due to it is the forerunner of airlines alliances research. The author has clearly state his main ideas which is approved that the alliances and code sharing agreements help airlines to increase competition advantage and profits. Furthermore, he was clearly describe the current problem and defined the alliances and code sharing. In addition, author give statistic charts and stronger evidences for clear explain the effects, benefits, oppositions and problems of the alliances and code sharing. However, I think to his conclusion was very weak and he must use strong statement in his conclusion. His research can be better if he can find some evidences about airline gain the competition advantage by alliances and code sharing agreements.
In conclusion, this paper is well organized and worth reading. After reading, this paper enlightens me on the issue of airline alliances, especially on oppositions and problems. In addition, it enhanced my viewpoint about the effect and benefit of the airline alliances. I believe that this article is very helpful to my research paper.
Reference:
Kraats, S. V. (2000). Gaining a competitive edge through airline alliances. Competitive Review, 10, 2, 56-64.
Airlines always pursue the best way to be more efficient and safety to service their clients for snatch competitive advantages and greatest benefits especially for global civil aviation markets. Therefore many international airlines move into new phases of economic agreements in order to gain competitive advantages and revenues. In general, airline used the alliances and code sharing as the most common business models. However, airlines alliances are profound and have been constrained by some international, inter-alliances and internal alliances conflicts of benefits. For this reason, my research paper is researching into the obstacles of airline alliances by internal and external view. Based on my research requirement, I need refer some articles about the definition, advantage, situation, effect, and benefit of airline alliances .Thus I adopt the article “Gaining a Competitive Edge through Airline Alliances” as my critical review article.
In Stephan Vander Kraats’s article “Gaining a Competitive Edge through Airline Alliances,” he stated that alliances and cods sharing are popular among airlines and helping the airline gaining the competitive advantages. According to his article, “alliance is a merging of resources, operations, or financial interests between one entity and another entity.” In other words, alliance is an agreement between two or more airlines to cooperate for the foreseeable future on a substantial level. Generally speaking, the degree of cooperation differs between alliances. As regards Code sharing, it is “marketing arrangement that permits a carrier to sell service under its name and airline designator code when the service is provided in whole or part by another air carrier.” Most airlines want to expand market and entry the new market segments, or to eliminate competition, hence airlines enter alliances and code sharing agreements. Because alliances and code sharing are paths for airline expand its flight network without huge investments. In addition, there have some barriers to entry in airline industry such as financial barrier and priority obstacles. It is mean that major airlines have exclusive-use gate leases, hold best take off and landing time or slots, who dominate the best and desirable airports. New and small airline are difficult to entry in this high profit routes. As a result, most small airlines can eliminate these obstacles depend on alliances and code sharing. Indeed, alliances and code sharing agreements create a variety of benefits to both airlines and society. For example, the employee job security of airlines, efficiency of passenger’s flight connections, revenues of airlines are greatly increased. Nevertheless, alliances and code sharing agreements induce some critics and problems. Government and some people seem to think that airline industry will become to anticompetitive market which cause Mega-carriers due to alliances agreements. As a consequence, perhaps others airlines and new airline can’t entry and mega-carriers enormous economical force to restrain trade and increase pricing. Besides, He stated that there is currently Insufficient data to determine whether good or bad in competition and fares. At final, author claimed that although alliances and code sharing agreements have some obstacles need to result, they represent critical and important sources of new traffic and revenues.
This article had effectively answer possible objections at the correct vocabulary level because it belongs in journal paper from Competitive Review. Although this paper had a little outdated, I think it is worth to refer this article due to it is the forerunner of airlines alliances research. The author has clearly state his main ideas which is approved that the alliances and code sharing agreements help airlines to increase competition advantage and profits. Furthermore, he was clearly describe the current problem and defined the alliances and code sharing. In addition, author give statistic charts and stronger evidences for clear explain the effects, benefits, oppositions and problems of the alliances and code sharing. However, I think to his conclusion was very weak and he must use strong statement in his conclusion. His research can be better if he can find some evidences about airline gain the competition advantage by alliances and code sharing agreements.
In conclusion, this paper is well organized and worth reading. After reading, this paper enlightens me on the issue of airline alliances, especially on oppositions and problems. In addition, it enhanced my viewpoint about the effect and benefit of the airline alliances. I believe that this article is very helpful to my research paper.
Reference:
Kraats, S. V. (2000). Gaining a competitive edge through airline alliances. Competitive Review, 10, 2, 56-64.
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