Capturing and Delivering Value in the Trans-Atlantic Air Travel Market: The Case of the Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways Strategic Joint Venture

Abstract

<p class="keywords">This paper presents a case study of the Air France-KLM, Delta Air Lines, and Virgin Atlantic transatlantic joint venture, one of the world’s largest strategic passenger joint ventures. The study used a qualitative research approach. The data gathered for the study was examined by document analysis. The strategic analysis of the joint venture was based on the use of Porter’s Five Forces Model. The study found that the joint venture has evolved over time through the addition of KLM Royal Dutch Airlines, Alitalia, and Virgin Atlantic Airways to the original joint venture between Air France and Delta Air Lines. The joint venture has provided significant synergistic benefits to the partners and has allowed the partners to access new markets and to participate in the evolution of the transatlantic air travel market, one of the world’s major air travel markets. The joint venture has also enabled the venture partners to enhance their competitive position through strengthened service offerings, a comprehensive route network that offers customers a high level of connectivity, and greater flight frequencies within their own route networks, all of which creates value for the partners. A limitation of the study was that the annual revenue, revenue passenger kilometres performed, or passenger load factors data was not available. It was, therefore, not possible to analyze the business performance of the joint venture.</p>

Knowledge Transfer and the Development of Airline business in Africa: Kenya Airways, 1977-2017

“…finding is consistent withBaxter (2018), who found that the Air France-KLM, Delta Airlines, and Virgin Atlantic joint venture delivered analogous synergetic value. At the outset of the strategic alliance in 1996, there was need for capital injection and management skills to enhance the performance of KQ.…”

“…Airlines interact through various kinds of alliances, such as joint ventures, mergers and acquisitions, and codeshare for marketing merits (Bamberger, Carlton, and Neumann 2004), with goals such as deterring competition and new entrants (Chen and Ross 2000), and efficiency rationale (Brueckner and Spiller 1991), pooling resources, and risk diversification. (Baxter 2018).…”

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