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Consolidation

Analysis on benefits of innovations in airline ownership or operating structures.

Reports

Benefits of Alliances and Joint Ventures 
Research discussing potential for pro-competitive efficiency gains and benefits for consumers from airline alliances and joint ventures.
Full report (pdf)
 
Revisiting Alliances
by Jan Brueckner, Darin Lee and Ethan Singer
Do airline alliances lead to lower fares for passengers or do they do more harm than good?  Alliances are frequently at the center of regulatory controversy and some recent studies have suggested that one of their main advantages – generating lower interline fares – may no longer hold.  Bruckner, Lee and Singer revisit this issue by assessing the interline fare impacts of alliances operating on routes to and from the US.  They evaluate the extent to which various forms of airline cooperation (codeshare, alliance, immunized alliance) affect interline fares.  
Full report (pdf)  
 
Airline M&A activity: A new super-cycle or over-exuberance?
by Chris Tarry, CTAIRA
The last six months have seen an almost unprecedented focus on merger and acquisition activity in the airline industry. Despite the excitement, it is necessary to question where the value may arise from M&A activity. Size alone has never been a sufficient condition for improved performance. We may be close to the top of the market a period generally associated with high prices paid for acquisitions. While fortune favours the brave, investors must also remember the adage that those who act in haste repent at leisure.
Full report (pdf)
 
Parochialism in international aviation: the paradox of airline ownership and control
by Dan Edwards, UK Civil Aviation Authority
The airline industry, in common with other major business sectors, is currently seeing a lot of speculation and proposals for mergers and acquisition activity. However, in contrast to other sectors such as steel or telecoms, the proposed airline deals are of a national rather than global character. This is not a coincidence, but linked to the tight ownership and control rules within the industry that restrict foreign investment in national airlines. 
Full report (pdf)
 
The competition effects of airline mergers and alliances
by Mike Tretheway, InterVISTAS Consulting Inc
The analysis of the potential competition effects of an airline merger or alliance often focuses on the change in average fare prices. However, this approach is fundamentally flawed. It should be broadened to cover the impact on economic efficiency. The pricing structure of an airline is not uniform; instead different customers are charged different prices. 
Full report (pdf)

New business models to make airlines more strategic and agile
by Professor Nawal Taneja, Ohio State University
Noted futurists are envisioning a world of consumers, suppliers and societies that are radically different from the past. In this essay Professor Nawal Taneja considers that airlines, individually and collectively, face a number of game-changing forces. Senior airline executives need to examine new business models to adapt to the potentially radically different marketplace. In his view, the alternatives are bankruptcy, shrinkage of network, government bailouts or market presence that is irrelevant. 
Full report (pdf)

 

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