Study of fusion: Star Alliance

Abstract

In 1997, Thai, Lufthansa, SAS, Air Canada and United Airlines combined to create Star Alliance, the largest network of airlines. Star Alliance is a consortium of companies that aims to become the leading network for frequent travelers with high value customers (generating high income) and to contribute to the long-term profitability of its members beyond the capabilities of the individual.

In 1997, Thai, Lufthansa, SAS, Air Canada and United Airlines combined to create Star Alliance, the largest network of airlines.

Star Alliance is a consortium of companies that aims to become the leading network for frequent travelers with high value customers (generating high income) and to contribute to the long-term profitability of its members beyond the capabilities of the individual. In 9 years, the aviation landscape has changed dramatically owing to mergers, alliances, and the emergence of a low-cost model.

Star Alliance has gone through various stages of development and maturity, and is currently experiencing a period hinge due to economic difficulties and the very strong growth of the network. Our study will therefore be in two parts. Firstly, we will analyze the organization Star Alliance and the context in which it operates, and then we will study the strategic scenario required to maintain the competitiveness of Star Alliance and the effectiveness of its actions for member companies.

For maximum competitiveness and profitability, airlines form alliances among themselves. An alliance can be a point between two companies on a single service or a comprehensive strategy as is the case with Star Alliance member airlines.

Three major alliances share the market: One World, Skyteam and Star Alliance. Some members of opposing alliances may also have specific agreements between them. This applies for example to the Paris-Vienna flights that are operated jointly by Air France (SkyTeam) and Austrian Airlines (Star Alliance). The Alliance members may also have agreements with companies that are free electrons (not part of any alliance), example: Air France (SkyTeam) with Middle East Airlines. Free electrons can in turn ally on specific sailings, such as Air India and Malaysia Airlines.

The code share flights:
One of the tools used by alliance members to better cope with competition and position themselves especially in the markets is the sharing of code, or "code sharing". Through this business practice, an airline may sell under its own code, the flights of other carriers. It can then buy a ticket to a destination with the company and actually fly X and Y with the company by not learning at the time of boarding. For a codeshare flight, there are thus airlines that "operate" the flight and one or more others who do the "market".

If this practice was originally intended to help the "small" national companies to offer a wider choice than they could deliver alone, now code share has become a formidable weapon in the war of air transport. Thus in recent years European airlines, American and Asian multiply agreements doubling or tripling the same time their offerings without increasing their fleet and staff.

Exchange and outsourcing services across the network:
For mainly economic reasons, an airline operates from a single database, or a very limited number of bases. It brings together in this place its administrative activities, and especially the maintenance of its aircraft. The provision of services in ports of call generally costs him much more than on its base, particularly in underserved stops. Like the existing bilateral agreement, airlines of the same alliance members share among themselves or outsource services such as passenger check-in, baggage handling, aircraft servicing. Thus, they centralize their operations up from platforms correspondence appointed hubs.
Alliances and carry out a multiplication of ground services for passengers (private lounges, local agency representation) and the correspondence between flights within a single alliance is made easier by the implementation of a registration unique.

Loyalty programs:
With the development of traffic and competition between companies, they wanted to build customer loyalty. At the Alliance that means the community benefits: the miles earned on various network companies are combined on a loyalty program specific to one company and can be used on any carrier network . E.g. you are a member of the loyalty program Lufthansa, when you fly Spanair, you earn miles on Lufthansa your program and you can use them on ANA if you wish.

Tags: Star One Alliance, Lufthansa, Thai, Air Canada, SAS, United Airlines