DOCSLIB.ORG

Uva-DARE (Digital Academic Repository)

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

UvA-DARE (Digital Academic Repository) A Transaction Cost Analysis of Scheduled international Air Transport of Passengers Ravoo, M. Publication date 2000 Document Version Final published version Link to publication Citation for published version (APA): Ravoo, M. (2000). A Transaction Cost Analysis of Scheduled international Air Transport of Passengers. Universiteit van Amsterdam. General rights It is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulations If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl) Download date:10 Oct 2021 AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONALL AIR TRANSPORT OFF PASSENGERS I I MONIQUEE RAVOO AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONAL AIRR TRANSPORT OF PASSENGERS S 1 1 AA TRANSACTION COST ANALYSIS OFF SCHEDULED INTERNATIONAL AIRR TRANSPORT OF PASSENGERS S ACADEMISCHH PROEFSCHRIFT terr verkrijging van de graad van doctor aann de Universiteit van Amsterdam opp gezag van de Rector Magnificus prof.. dr J.J.M. Franse tenn overstaan van een door het college voor promoties ingestelde commissie,, in het openbaar te verdedigen in de Aula der Universiteit opp woensdag 25 oktober 2000, te 12.00 uur doorr Monique Ravoo geborenn te Amsterdam Promotorr prof. dr A. Heertje Co-promotor:: prof. drs J.B. Polak, emeritus Faculteit:: Economische wetenschappen en econometrie Preface e Too many people, air transport resembles the world of Peter Stuyvesant: glamorous, adventurous and tingedd wim danger. Even if environmental damage and a number of accidents have somewhat changed matt image, air transport still has a trace of the spectacular. The image confirms the idea that 'the pleasuree of travelling is in the journey.' Travellingg inside, as you do when writing a doctoral thesis, indeed generates pleasure but also pain: thee 'pain' of tracking down «formation, clarifying key questions, developing a model, refining knowledgee of fundamental economics, working hours on end, rethinking, rewriting, checking, editing...and,, finally, seeing light at the end of the tunnel but not seeing it come closer. Even worse, beingg m the light for a short while, only to discover that there is another tunnel ahead. When I began mis thesiss more than five years ago, I could never have imagined what lay ahead of me. Whyy would anybody m their right minds embark on a thesis, you may ask? Well, because there is also pleasuree ahead. Finding that pleasure requires a strong interest in the subject of investigation. Speaking forr myself, this was certamry the case, wfth a job at Schiphol at the time and a father who had worked theree since I was two years old. To my first memories belong walking with my dad in the Amsterdam woodss and finishing our walk drinking a cup of cocoa at parking lot P3. Who would have thought thenn ? Writingg a thesis gives pleasure when assumptions are confirmed, new thoughts spring to mind, the scopee for improvement becomes clear, or a line of reasoning appears sound: the 'aha erlebnis'. The journeyy has taken me more than five years. It has both cost me and given me a lot. Now uiat me journey hass ended, I'm glad mat it's over. Theree are many people who have in one way or another helped me to continue my trip. I am indebted to myy supervisors, Professor Heertje and Professor Polak, for providing me with the inspiration needed to conductt research. They were able to extract the best from me through a unique combination of knowledge,, character and incentives. I also wish to mention Professor Wassenbergh, the well-known professorr of air law at Leyden University, who showed me and my fellow students some years ago how challengingg a course in air law could be. And how you should not proceed from 'what is' but be willing too turn your mind to 'what can be'! The term 'lege fèrenda' should sound familiar to all those who have hadd die opportunity to attend his classes. Thanks are due to my 'paranimfen' - Jacques, who read a lot aboutt what his job implied but didn't fail to act upon k, and Rene, who was busy developing his businesss but always found time to give advice on a whole range of matters - and bom their wives, Dady andd long-time friend Sandra. Jan-Willem, explained a lot to me about the publishing business and was alwayss willing to talk about it over dinner somewhere. -i-- Family,, friends and colleagues, especially my former employer, Schiphol Group, did not always understandd what I was doing (and why I didn't do all the things a young woman is supposed to do), but sometimess provided great insight into my motives for writing a thesis. Their opinions helped me grow duringg my research. II certainly need to mention Ivette at this point, who was able with bottomless energy and insurmountablee logic to point out the not so logical parts of both my English and my reasoning. Often, thee solution to our discussion was to delete a sentence. We became masters at leaving things out, notwithstandingg that the book has still reached more than 200 pages! AWiough it may have seemed as if II did not like our discussions, this may have been due more to frustration on my side than anything else. Again,, I learnt a lot. Lastt but not least, I am greatly indebted to Jan, who facilitated and supported the journey in many ways.. Words fail me here. It's good to know that we have some real travel ahead of us. Moniquee Ravoo Amstelveen,, September 2000 -11 1 Contents s Preface e l l Tablee of abbreviations and acronyms vii i P«fe e Chapterr I Introducbon n 1.11 - Objective of the thesis 1.22 -Context of the thesis 1.33 - Central questions 1.44 -Methodology 1.55 - Scope of the thesis 1.66 -Organisation of the diesis Chapterr II Transactionss and transaction cost .n»tv<^ 2.11 - Introduction 9 9 2.22 Transactions 9 9 2.33 - Transaction costs 12 2 2.44 - Factors influencing transaction 15 5 2.4.11 -Frequency 15 5 2.4.22 - Uncertainty 17 7 2.4.33 - Asset specifiry 19 9 2.4.44 - Bounded rationality 21 1 2.4.55 - Opportunism 22 2 2.55 - Effectiveness 27 7 2.66 Industry environment 31 1 2.77 - Governance structures 31 1 2.7.11 - Non-specific structure 31 1 2.7.22 - Semi-specific structure 32 2 2.7.33 - Transaction-specific structure 33 3 2.7.3.11 -General comment 33 3 2.7.3.2-Thee 6nn 34 4 2.7.3.33 -TheState 35 5 2.88 - Concluding remarks 40 0 Chapterr m- Thee Bilateral stmchms 3.11 n 42 2 3.2-Bilateralism m 45 5 3.3-Partiess to the transaction 50 0 3.3.1-States s 50 0 3.3.1.1-- Psychological goal 51 1 3.3.1.22 - Financial goal 52 2 3.3.1.3-Politicall and social goal 54 4 3.3.1.44 - Implementation of the air transport goal in the Bilateral structure 56 6 3.3.1.4.11 - Traffic votume 57 7 3.3.1.4.22 * Fleet composition 57 7 3.3.1,4.3-Markett behaviour 58 8 3.3.1.55 - Interstate relations 59 9 3.3.22 - Airlines 59 9 3.3.33 - Airports 64 4 3.3.4-Internationall organisations 69 9 3.44 - The object of the exchange and property rights 71 1 3.5-Thee transaction process 75 3.5.11 -Contact phase 75 3.5.22 - Contract phase 76 6 3.5.33 n phase 78 8 3.5.44 - Compliance and enforcement 80 0 3.66 - Characterization of the Bilateral structure 83 3 3.77 - Further developments g4 Chapterr IV- The Community structure 4.1'Introductionn 37 4.22 - European integration, EC Treaty and air transport 89 9 4.33 - European air transport packages 95 5 4.44 - Current Community structure 95 4.55 - Parties to the transaction 99 4.5.1-- EC Commission 99 9 4.5.22 - EC Council of Ministers 100 0 4.5.33 - EC Parliament 102 2 4.5.4-ECCourts s 102 2 4.5.55 - Objectives of the EC institutions 104 4.5.66 - Member States 105 5 4.5.6.11 - General remarks 105 5 4.5.6.22 - Implementation of the air transport goal in the Community structure 109 4.5.6.2.11 - Traffic volume 109 9 4.5.6.2.22 - Fleet composition 109 9 4.5.6.2.33 - Market behaviour 109 9 4.5.6.33 - Interstate relations 110 0 4.5.77 - Community carriers U2 4.5.88 - Community airports U5 4.5.99 - International organisations Hg 4.66 - The object of the exchange and property rights 119 4.77 - The transaction process 120 4.7.1-Contactt phase 120 4.7.22 - Contract phase 120 4.7.33 - Execution phase 126 4.7.4-- Compliance and enforcement 128 4.88 - Characterization of the Community structure 130 4.99 - Further developments 131 Chapterr V - Comparison of the Bilateral «id Cmnmmiiiv structures 5.1-Introductionn 133 5.22 -Characteristics of and trends the air transport industry 134 5.2.1-Internationall nature 134 5.2.22 - Co-operation 134 5.2.33 - State intervention and deregulation 13g 5.2.44 - Industry environment 139 5.2.55 - New market players 141 1 5.33 - Core dimensions 141 1 5.44 - Features of the Bilateral structure 143 5.5-- Effectiveness of die Bilateral structure 145 5.66 -Transaction cost efficiency of the Bilateral structure 147 5.6.11 - Transaction frequency 147 5.6.22 - Uncertainty 149 5.6.33 - Asset specificity
Recommended publications
  • Prof. Paul Stephen Dempsey

    Prof. Paul Stephen Dempsey

    AIRLINE ALLIANCES by Paul Stephen Dempsey Director, Institute of Air & Space Law McGill University Copyright © 2008 by Paul Stephen Dempsey Before Alliances, there was Pan American World Airways . and Trans World Airlines. Before the mega- Alliances, there was interlining, facilitated by IATA Like dogs marking territory, airlines around the world are sniffing each other's tail fins looking for partners." Daniel Riordan “The hardest thing in working on an alliance is to coordinate the activities of people who have different instincts and a different language, and maybe worship slightly different travel gods, to get them to work together in a culture that allows them to respect each other’s habits and convictions, and yet work productively together in an environment in which you can’t specify everything in advance.” Michael E. Levine “Beware a pact with the devil.” Martin Shugrue Airline Motivations For Alliances • the desire to achieve greater economies of scale, scope, and density; • the desire to reduce costs by consolidating redundant operations; • the need to improve revenue by reducing the level of competition wherever possible as markets are liberalized; and • the desire to skirt around the nationality rules which prohibit multinational ownership and cabotage. Intercarrier Agreements · Ticketing-and-Baggage Agreements · Joint-Fare Agreements · Reciprocal Airport Agreements · Blocked Space Relationships · Computer Reservations Systems Joint Ventures · Joint Sales Offices and Telephone Centers · E-Commerce Joint Ventures · Frequent Flyer Program Alliances · Pooling Traffic & Revenue · Code-Sharing Code Sharing The term "code" refers to the identifier used in flight schedule, generally the 2-character IATA carrier designator code and flight number. Thus, XX123, flight 123 operated by the airline XX, might also be sold by airline YY as YY456 and by ZZ as ZZ9876.
  • Tendencje Rozwojowe Aliansów Strategicznych W Transporcie Lotniczym

    Tendencje Rozwojowe Aliansów Strategicznych W Transporcie Lotniczym

    Transport lotniczy Tendencje rozwojowe aliansów strategicznych w transporcie lotniczym Iwona Anna Czarnecka Alianse lotnicze są formą współpracy linii lotniczych (często konkurujących ze sobą). Uczestnictwo w aliansie to określone korzyści, ale także liczne zagrożenia. A jednak wynikający z procesów liberalizacji proces łączenia się przewoźników w alianse wykazuje tendencję rozwojową. Na przestrzeni lat zmieniają się cele i zakres aliansów. Integracja staje się głębsza i przyjmuje formę fuzji i przejęć. Obserwujemy budowę struktury kapitałowej. Widoczne jest ograniczenie konkurencji na rynku lotniczym wynikające z konsolidacji przewoźników wokół największych i najmocniejszych linii lotniczych. Wprowadzenie połączeń. Taką strategię przyjęły m.in. linie: mi innych aliansów. Teoria gier zastosowana BA, Lufthansa, KLM. Strategia przystępowa- do analizy współpracy linii lotniczych przez Kryzys finansowy, który ogarnął świat nia do aliansów, skupionych wokół najwięk- T. Busacker’a i J. P. Clark’a pokazała okolicz- w 2008 roku wpłynął także na branżę lot- szych linii lotniczych, była wybierana przez ności sprzyjające dobrej współpracy w ra- niczą. Przewoźnicy ponieśli ogromne straty. coraz większą liczbę przewoźników, zwłasz- mach aliansu: Nowe warunki funkcjonowania wymuszo- cza tych średnich i małych, dla których sta- • umowa zawarta pomiędzy członkami ne przez kryzys pokazują, że należy dokonać nowiła szansę utrzymania się na rynku. powinna mieć długotrwały charakter, co rewizji naszego podejścia do aliansów lotni- Do podejmowania współpracy
  • Airline Alliances

    Airline Alliances

    AIRLINE ALLIANCES by Paul Stephen Dempsey Director, Institute of Air & Space Law McGill University Copyright © 2011 by Paul Stephen Dempsey Open Skies • 1992 - the United States concluded the first second generation “open skies” agreement with the Netherlands. It allowed KLM and any other Dutch carrier to fly to any point in the United States, and allowed U.S. carriers to fly to any point in the Netherlands, a country about the size of West Virginia. The U.S. was ideologically wedded to open markets, so the imbalance in traffic rights was of no concern. Moreover, opening up the Netherlands would allow KLM to drain traffic from surrounding airline networks, which would eventually encourage the surrounding airlines to ask their governments to sign “open skies” bilateral with the United States. • 1993 - the U.S. conferred antitrust immunity on the Wings Alliance between Northwest Airlines and KLM. The encirclement policy began to corrode resistance to liberalization as the sixth freedom traffic drain began to grow; soon Lufthansa, then Air France, were asking their governments to sign liberal bilaterals. • 1996 - Germany fell, followed by the Czech Republic, Italy, Portugal, the Slovak Republic, Malta, Poland. • 2001- the United States had concluded bilateral open skies agreements with 52 nations and concluded its first multilateral open skies agreement with Brunei, Chile, New Zealand and Singapore. • 2002 – France fell. • 2007 - The U.S. and E.U. concluded a multilateral “open skies” traffic agreement that liberalized everything but foreign ownership and cabotage. • 2011 – cumulatively, the U.S. had signed “open skies” bilaterals with more than100 States. Multilateral and Bilateral Air Transport Agreements • Section 5 of the Transit Agreement, and Section 6 of the Transport Agreement, provide: “Each contracting State reserves the right to withhold or revoke a certificate or permit to an air transport enterprise of another State in any case where it is not satisfied that substantial ownership and effective control are vested in nationals of a contracting State .
  • Strategic Airline Alliances: Advantages for Major Airlines Being Aligned

    Strategic Airline Alliances: Advantages for Major Airlines Being Aligned

    STRATEGIC AIRLINE ALLIANCES: ADVANTAGES FOR MAJOR AIRLINES BEING ALIGNED Jorge J. Villar Department of Aerospace Engineering, Universidad Politécnica de Madrid, Spain Javier Tafur Department of Industrial Engineering, Business Administration and Statistics, Universidad Politécnica de Madrid, Spain Guozhu Jia School of Economics and Management, Beijing University of Aeronautics and Astronautics (Beihang University), China Fernando Zobel 3, 3º C 16002 Cuenca Spain Telephone: (0086)13691243311, (0034)659928918 E-mail: [email protected] Abstract Some factors including the deregulation in the U.S and the liberalization in Europe of the airline industry are essential to understanding why the number of partnership agreements between airlines has increased during the last 25 years. These events, coupled with the continuous economic downturn and the 9/11 catastrophe seem to be the perfect framework for the tendency to develop airline strategic alliances. However, it has been observed that this trend was not followed during the period 2005- 2008. The purpose of this paper is to analyze if a benefit was experienced by the major airlines who became a member of the current 3 big alliances compared to the major airlines that decided not to become a member or were not admitted into the alliances during 2005-2008. The methodology of this report includes an analysis of several airlines’ performance figures. These performance figures include the revenue passenger kilometers (RPKs), the passenger load factor (PLF) and also the market share (MS). The figures will be compared between the aligned airlines and others which have similar business models. The value of this paper is to reveal whether being aligned provides advantages to major airlines under a bearish airline market in a globalized environment.
  • Historia De La Aviación Comercial Desde 1909 Hasta Nuestros Días

    Historia De La Aviación Comercial Desde 1909 Hasta Nuestros Días

    FACULTAT DE FILOSOFIA I LETRES, DEPARTAMENT DE CIÈNCIES HISTÒRIQUES I TEORIA DE LES ARTS HISTORIA DE LA AVIACIÓN COMERCIAL DESDE 1909 HASTA NUESTROS DÍAS TESIS DOCTORAL PRESENTADA POR EL DR. MARTÍN BINTANED ARA DIRIGIDA POR EL DR. SEBASTIÁ SERRA BUSQUETS CATEDRÀTIC D'HISTÒRIA CONTEMPORÀNIA PARA OPTAR AL TÍTULO DE DOCTOR EN HISTORIA CURSO ACADÉMICO 2013/2014 Martín Bintaned Ara 2 Historia de la aviación comercial Resumen Esta tesis doctoral investiga acerca de la aportación de la aviación comercial a la historia contemporánea, en particular por su impacto en las relaciones exteriores de los países, su papel facilitador en la actividad económica internacional y por su contribución al desarrollo del turismo de masas. La base de trabajo ha sido el análisis de la prensa especializada, a partir de la cual se han identificado los casos innovadores. Gracias al análisis de su origen (tecnológico, geo- político, aero-político, corporativo, de producto y en la infraestructura) y a su contextualización, hemos podido trazar la historia de la aviación comercial desde su origen en 1919 hasta nuestros días. Palabras clave: Historia contemporánea, Aviación comercial, Política aérea, Relaciones internacionales, Turismo, Innovación, Aerolíneas, Aeropuertos Abstract This doctoral thesis analyses the contribution of commercial aviation to the contemporary history, particularly in the field of external relations, international economy and mass tourism. We have identified all innovations with a structural impact on the industry through specialised press, considering the changes on technology, geopolitics, aeropolitics, business models, product and services, and infrastructure. This methodology has allowed us to write the history of the commercial aviation since its origin in 1919.
  • DENNIS E DUSTRY CONSOLIDATION . ND FL. L Ite

    DENNIS E DUSTRY CONSOLIDATION . ND FL. L Ite

    i::i DENNIS E_DUSTRY CONSOLIDATION ._ND FL._L_ItE AJRLLNE _TWORK STRUCTURES IN EUROPE m NigelDc_n_ Senior Research Fellow Transport Studies Group University of Westminster 35 Marylebone Road LONDON NW1 5LS Tel: .444 20 79!1 5000 ext 334A. Fax: +44 20 7911 5057 e-mall: [email protected] A__hs!ra__ct In the current downaa'n in demand for air travel, major airlines are revising and rationalising their networks in an attempt to improve financial performance and strengthen their defences against both new entrants and traditional rivals. Expansion of commercial agreements or alliances with other airlines has become a key reaction to the increasingly competitive marketplace. In the absence, for regulatory reasons, of cross-border mergers these are the principal means by which the industry can consolidate internationally. The failure of airlines such as Sabena and Swlssair has also enforced restructuring at some of Europe's busier airports. This paper analyses the developments which have been taking place and attempts to itentify the implications for airline network _s and the function of different hub airports. Airlines have rationalised their networks by withdrawing services that feed the hubs of rival alliances. New ;links have however _ created hthatare made feasible by the alliance support. The range of services available to passengers in long-haul markets to/from Europe is evaluated before and after recent industry reorganisation. Hubs are crucial to interlink the route networks of parmers in an alliance. However, duplication between nearby hub airports that find themselves within the same airline alliance can lead to loss of service at the weaker locations.
  • Analysis of Global Airline Alliances As a Strategy for International Network Development by Antonio Tugores-García

    Analysis of Global Airline Alliances As a Strategy for International Network Development by Antonio Tugores-García

    Analysis of Global Airline Alliances as a Strategy for International Network Development by Antonio Tugores-García M.S., Civil Engineering, Enginyer de Camins, Canals i Ports Universitat Politècnica de Catalunya, 2008 Submitted to the MIT Engineering Systems Division and the Department of Aeronautics and Astronautics in Partial Fulfillment of the Requirements for the Degrees of Master of Science in Technology and Policy and Master of Science in Aeronautics and Astronautics at the Massachusetts Institute of Technology June 2012 © 2012 Massachusetts Institute of Technology. All rights reserved Signature of Author__________________________________________________________________________________ Antonio Tugores-García Department of Engineering Systems Division Department of Aeronautics and Astronautics May 14, 2012 Certified by___________________________________________________________________________________________ Peter P. Belobaba Principal Research Scientist, Department of Aeronautics and Astronautics Thesis Supervisor Accepted by__________________________________________________________________________________________ Joel P. Clark Professor of Material Systems and Engineering Systems Acting Director, Technology and Policy Program Accepted by___________________________________________________________________________________________ Eytan H. Modiano Professor of Aeronautics and Astronautics Chair, Graduate Program Committee 1 2 Analysis of Global Airline Alliances as a Strategy for International Network Development by Antonio Tugores-García
  • Swissair's Collapse

    Swissair's Collapse

    IWIM - Institut für Weltwirtschaft und Internationales Management IWIM - Institute for World Economics and International Management Swissair’s Collapse – An Economic Analysis Andreas Knorr and Andreas Arndt Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“ Band 28 Hrsg. von Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth Universität Bremen Swissair’s Collapse – An Economic Analysis Andreas Knorr and Andreas Arndt Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth (Hrsg.): Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“, Bd. 28, September 2003, ISSN 0948-3837 (ehemals: Materialien des Universitätsschwerpunktes „Internationale Wirtschaftsbeziehungen und Internationales Management“) Bezug: IWIM - Institut für Weltwirtschaft und Internationales Management Universität Bremen Fachbereich Wirtschaftswissenschaft Postfach 33 04 40 D- 28334 Bremen Telefon: 04 21 / 2 18 - 34 29 Telefax: 04 21 / 2 18 - 45 50 E-mail: [email protected] Homepage: http://www.iwim.uni-bremen.de Abstract Swissair’s rapid decline from one of the industries’ most renowned carriers into bank- ruptcy was the inevitable consequence of an ill-conceived alliance strategy – which also diluted Swissair’s reputation as a high-quality carrier – and the company’s inability to coordinate effectively its own operations with those of Crossair, its regional subsidiary. However, we hold that while yearlong mismanagement was indeed the driving force behind Swissair’s demise, exogenous factors both helped and compounded
  • 02/08/07 Overview of Trends and Developments In

    02/08/07 Overview of Trends and Developments In

    02/08/07 English only OVERVIEW OF TRENDS AND DEVELOPMENTS IN INTERNATIONAL AIR TRANSPORT (ICAO Secretariat) 1. INTRODUCTION 1.1 This paper provides a global overview of regulatory and industry trends and developments of international air transport that have taken place over the past decade, focussing on significant developments since the last Assembly. It is prepared by the Secretariat for information purpose, which supplements Assembly working paper A36-WP/16, a Council report on Development and Economic Regulation of International Air Transport. 1.2 The overview has two parts. The first part looks at major regulatory movements towards the liberalization of international air transport, including bilateral and regional liberalization, air service negotiations involving a group of States, multilateral initiatives, national liberalization policies, competition and consumer protection policies. The second part reports on the airline industry’s responses to an ever changing and more competitive marketplace, including airline alliances, mergers and acquisitions, privatization, airline business models and product distribution. 2. REGULATORY DEVELOPMENTS 2.1 Liberalization of international air transport regulation is the cornerstone upon which to build the future growth of the air transport industry. The process has been evolving at various levels since the mid-1990s. In terms of the impact or extent, it is estimated that, in 2006, about 31 per cent of the country-pairs with non-stop passenger air services and about 49 per cent of the seat capacity offered occurred between States which have embraced liberalization either by bilateral “open skies” air services agreements or by regional/plurilateral liberalized agreements and arrangements (compared with less than 4 per cent and about 20 per cent respectively in 1995, and about 16 per cent and about 42 per cent respectively in 2000).
  • Emerging Tendencies in the European Airline Industry

    Emerging Tendencies in the European Airline Industry

    Thesis from International Master Program – Strategy and Culture Emerging Tendencies in the European Airline Industry - an investigation of SAS and Ryanair - Mandy Jacob Zuzana Jakešová Supervisor: SuMi ParkDahlgaard The photograph (on reverse side) was taken by Oliver Semrau October 30, 2002 in London, a commercial poster of Lufthansa. It nicely illustrates the motivation of the thesis. Avdelning, Institution Datum Division, Department Date 2003-01-20 Ekonomiska Institutionen 581 83 LINKÖPING Språk Rapporttyp ISBN Language Report category Svenska/Swedish Licentiatavhandling X Engelska/English Examensarbete ISRN Internationella ekonomprogrammet 2003/2 C-uppsats X D-uppsats Serietitel och serienummer ISSN Title of series, numbering Övrig rapport ____ URL för elektronisk version http://www.ep.liu.se/exjobb/eki/2003/iep/002/ Titel Emerging Tendencies in the European Airline Industry - an investigation of SAS and Title Ryanair - Författare Mandy Jacob, Zuzana Jakešová Author Sammanfattning Abstract Background: The airline industry is unique and fascinating. It was protected through government controls until the early 1980s. However, due to deregulation policy the industry opened to free competition. As a result, collaborations and alliances were formed and low budget airlines were able to enter the market. Purpose: The purpose of this thesis is to present the current stage of the European airline industry by investigating the strategies of Ryanair and SAS with the help of strategic management tools. Procedure: Two companies were chosen, Ryanair as a low budget airline and SAS as a mature airline. The investigation was based on secondary data found in financial -, annual -, business - and company reports as well as in independent analyst reports and on the Internet.
  • Airline Alliances—Who Benefits?

    Airline Alliances—Who Benefits?

    Journal of Air Transport Management 8 (2002) 401–407 Airline alliances—who benefits? S.C. Morrish, R.T. Hamilton* Department of Management, University of Canterbury, Private Bag 4800, Christchurch 1, New Zealand Abstract The advent of global airline alliances in the 1980s gave rise to concerns that increased monopoly power of major carriers would lead to large and sustained producer surpluses. These global alliances now enjoy dominant market shares in the industry. This review examines some 15 years of alliance experience and finds no conclusive evidence that alliance membership has yielded monopoly profits to the airlines. Improvements in terms of load factors and general productivity levels have, for the most part, been accompanied by fare reductions of similar magnitude, resulting in only modest gains to the carriers. r 2002 Elsevier Science Ltd. All rights reserved. Keywords: Airline alliances; Monopolies; Fare levels 1. Introduction than between the carriers. The failure to join a global alliance would leave individual carriers isolated and at a This paper reviews the effect of alliance membership competitive disadvantage (Button et al., 1998). on the performance of international airlines. An airline A majority of airline alliances is route based. Park ‘alliance’ is any collaborative arrangement between two (1997) distinguished two major types of alliances as or more carriers involving joint operations with the being either complementary or parallel. The main declared intention of improving competitiveness and distinguishing features are that complementary alliances thereby enhancing overall performance. Despite a have non-overlapping routes, whereas parallel alliance history of instability and failure, alliances are now routes overlapped. Apart from routes, the most com- prevalent among international airlines.
  • Overview of Trends and Developments in International Air Transport1

    Overview of Trends and Developments in International Air Transport1

    24/03/09 English only OVERVIEW OF TRENDS AND DEVELOPMENTS IN INTERNATIONAL AIR TRANSPORT1 (ICAO Secretariat) 1. INTRODUCTION 1.1 This paper provides a global overview of regulatory and industry trends and developments of international air transport that have taken place since the mid-1990s, focussing on significant developments for the past five years. 1.2 The overview has two parts. The first part looks at major regulatory movements towards the liberalization of international air transport, including bilateral and regional liberalization, air service negotiations involving a group of States, multilateral initiatives, national liberalization policies, competition, and consumer protection policies. The second part reports on the airline industry’s responses to an ever changing and more competitive marketplace, including airline alliances, mergers and acquisitions, privatization, airline business models, and product distribution. 2. REGULATORY DEVELOPMENTS 2.1 The liberalization of international air transport regulation continued to evolve at various levels since the 1980s. It is estimated that, in 2008, this involved about 31 per cent of country-pairs with non-stop scheduled passenger air services and about 58 per cent of the frequencies offered, through either bilateral “open skies” air services agreements or regional/plurilateral liberalized agreements and arrangements (compared with about 7 per cent and 35 per cent, respectively, a decade ago, see Figure 1). 2.2 Bilateral liberalization. Bilateral air services agreements remain the