The effect of code-sharing alliances on airline profitability

Zou, Li; Chen, Xueqian

doi:10.1016/j.jairtraman.2016.09.006

Cited by 50 publications

(38 citation statements)

References 16 publications

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“…Lin [10] also demonstrated that in addition to an increase in the social welfare of travelers, the alliance might reduce international traveler excess and local direct travelers. Zou and Chen [11] investigated the effects of code sharing and global alliance on the performance of airlines simultaneously. The results showed that the profit margin of an airline was positively associated with the number of partners in code sharing.…”

Section: Literature Reviewmentioning

confidence: 99%

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Development of a Model for Locating Hubs in a Competitive Environment under Uncertainty: A Robust Optimization Approach

Nourzadeh

Ebrahimnejad

Khalili‐Damghani

et al. 2020

IJE

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This article explores the development of previous models to determine hubs in a competitive environment. In this paper, by comparing parameters of the ticket price, travel time and the service quality of hub airports, airline hubs are divided into six categories. The degree of importance of travel time and travel cost are determined by a multivariate Lagrange interpolation method, which can play an important role in allocating travelers to follower airline hubs. Then, based on the seasonal demand of travelers, we consider travel demand as uncertain parameters. To determine the robust counterpart of this category of hub location models, a robust optimization method is used. Finally, models are tested in a case study. The central results show that the follower airline's income has a considerable growth and can absorb nearly 2% of travelers of the leader airline due to lower travel costs and travel time compared to that of leader airline.

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Section: Literature Reviewmentioning

confidence: 99%

“…Constraint (11) guarantees that for each origin and destination , only variables related to airports in set ′ can be non-zero, and the remaining variables are equal to zero. = 0∀ ∈ , ∈ ; ∀ = 1,2; ∈ − ′…”

Section: Constraintsmentioning

confidence: 99%

Development of a Model for Locating Hubs in a Competitive Environment under Uncertainty: A Robust Optimization Approach

Nourzadeh

Ebrahimnejad

Khalili‐Damghani

et al. 2020

IJE

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“…The increasing prevalence of global alliances and code-sharing partnerships among airlines has led to their embeddedness into networks of multilateral "coopetitivity" [18], which is the concurrence of cooperation and competition activities among allied partners. This is because in the search of potential revenue gains or cost savings, more and more airlines have formed closer and deeper partnerships with allied partners (from the same global alliance), looking for resource sharing and joint marketing and branding.…”

Section: Global Alliances Backgroundmentioning

confidence: 99%

“…Furthermore, these kind of alliance activities can help airlines to reduce the cost per passenger, taking advantage of economies of scale, scope and density across geographical boundaries due to increased traffic, joint advertising and equipment sharing, as well as accessing resources that would otherwise not be attainable [7,8,13]. Many studies have investigated the positive impact that these collaborative partnerships have on airlines' performances i.e., [14][15][16][17][18].…”

Section: Introductionmentioning

confidence: 99%

The Contribution of Global Alliances to Airlines’ Environmental Performance

2019

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Global alliances have traditionally been related to improvements in the economic and operational performances of companies, particularly in the airline industry. However, we still do not know the effect of the participation in this kind of multilateral agreement on the environmental performance of airlines. The main aim of this work is to analyze whether the alliance membership of airlines has an effect upon their environmental performance, and if so, whether or not the characteristics of the global alliance, as well as the business model of the airline, may influence this relation to a greater or lesser extent. The results of regression and Analysis of Variance (ANOVA) in a sample of 252 airlines (58 included in one of the three global alliances: Star Alliance, Oneworld, and SkyTeam) show a strong and inverse relationship between environmental performance and belonging to an alliance. The paper also shows empirical evidence of the influence of the business model of the airline on environmental performance. These results suggest important implications for managers facing challenges regarding sustainability.

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“…It is generally recognized that measuring alliance groups' overall competitive advantage is hard work due to its complexity and the effect of external factors [3]. However, as firms' competition has moved from firm versus firm-level competition to group versus group-level competition [17,19,[26][27][28], and as the aviation industry is unexceptional in this phenomenon [28], it can be said that there is no doubt as to the importance of measuring alliance groups' competitive advantages, even though it is necessary to partly admit the methodological limitation.…”

Section: Introductionmentioning

confidence: 99%

Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

Seo

Itoh

2020

Sustainability

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Over the past several decades, the aviation industry has been reshaped, centering on global alliances, and these have grown exponentially. However, it is still not clear whether they are achieving sustained competitive advantages, and what are the specific competitive advantages of the three alliances (oneworld, SkyTeam, Star Alliance) arising on the customer side. This study aims to examine whether global alliance groups outperform the non-alliance group, how the three alliances differ regarding passengers’ perceptions, and what their competitive advantages are. A hybrid text mining analysis was adopted as this study’s method. Frequency tests, t-tests, one-way analysis of variance tests, and three-step mediated regression analyses were performed using 6393 ordinal and word-of-mouth (WOM) data. We found that the degree of passengers’ perceptions of alliances was low, the non-alliance group outperformed the alliance groups, and there were no significant differences between alliances on service rating and sentiment score. Only oneworld has competitive advantages that link to passengers’ service rating and sentiment score. These findings imply that alliances could not ensure competitive advantages that derive from customers’ perceptions, and although passengers partly perceived several selling points, their differentiation strategies are not successful.

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The effect of code-sharing alliances on airline profitability

Cited by 50 publications

References 16 publications

Development of a Model for Locating Hubs in a Competitive Environment under Uncertainty: A Robust Optimization Approach

Development of a Model for Locating Hubs in a Competitive Environment under Uncertainty: A Robust Optimization Approach

The Contribution of Global Alliances to Airlines’ Environmental Performance

Perceptions of Customers as Sustained Competitive Advantages of Global Marketing Airline Alliances: A Hybrid Text Mining Approach

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