International Strategic Alliance in the Airline Sector

International
Business
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Table Of Contents
INTRODUCTION...................................................................................3
Sky Team, Star Alliance and One World..........................................................3
CONCLUSION.......................................................................................9
REFERENCES.......................................................................................10
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INTRODUCTION
International business can be defined in the manner that the trade of goods, services,
capital at the international level and across the borders at the global level. Between two or
more countries cross border transactions of goods and services has been involved in it. For
doing the business at the overseas level, multinational companies need to create the separate
national markets into the one global market place. (Enderle, G., 2018). (Dani, S., 2016). In
this report, the analysis has been done on the international strategic alliance within the airline
sector and with the support of examples in the critical manner, explaining about how the
international strategic alliance has helped both the partners in achieving their objectives. The
chosen organisation for the international strategic alliance are Star Alliance, Sky team and
One world. Star alliance is the world’s largest global airline alliance. Its headquarter is
located in Frankfurt am Main, Germany. Sky team is one the world’s three major airline
alliances. It was the last of the three alliances to be formed, the first two being star alliance
and one world. One world objective is that to become the first choice of their customers for
the world’s frequent international travellers.
Star Alliance, Sky Team and One World
Star Alliance current CEO is Jeffrey Goh. Star alliance is the largest alliance among
the three in terms of passenger count with 762.27 million which is ahead of both sky team
and one world. Their slogan is that “The Way The Earth Connects”. This airline alliance has
the twenty six member airlines that operates a fleet of approximately five thousand hundred
thirty three aircraft. It serves more than 1290 airports in 195 countries on more than 1900
daily departures. The silver and gold with incentives including priority boarding and
upgrades. These are the two-tier rewards program which has the alliance. Many member
planes are painted in the alliance livery and Star alliance airline shares the airport terminals.
There are some member airlines and affiliates. (Georgakakis, and et.al., 2016). It includes
Aegean airlines, Air Canada, Air China, Air India, Air New Zealand, All Nippon Airways,
Asiana Airlines, Austrian Airlines, Avianca, Brussels Airlines, Copa Airlines, Croatia
Airlines, Egypt Air, Ethiopian Airlines, EVA Air, LOT Polish Airlines, Lufthansa, Turkish
Airlines, United Airlines. Star Alliance was founded on 14 May, 1997.
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In the year 1997, Star alliance announced an agreement from the five airlines on three
continents which are named as the United Airlines, Scandinavian Airlines, Thai Airways, Air
Canada and Lufthansa. For the purpose of advertising, the alliance choose Young &
Rubicam. The logo has been shared by the airlines with the five points which represents the
founding airlines from the initial level. (Herstad, S. J. and Ebersberger, B., 2015). Their
slogan goal is that the alliance will take every passengers to every major city on earth. Their
suspicious behaviour lead towards the non-competitive conduct. With the virtual merger of
its member the alliance was suspected by the European Union and speculation existed that by
the support of government regulations were relaxed the members into the one cooperation. In
the year 2004, Star Alliance created a regional concept with the participation of smaller
regional carriers for the purpose of market penetration. By an alliance member the alliance
had to be sponsored. Based on the revenue passenger kilometres, the airlines had the 28
percentage coverage which is greater than the market share of all the airlines at the global
level. (Realita, T. N. and Mukhlis, I., 2021). The all types of alliance carriers has been
employed over 405000 pilots, flight attendants and other staff. Some of their aircrafts painted
with the alliance livery which includes some of the star alliance members. Keeping its logo
on the tails of its aircraft then the Singapore airlines is only the exception and on their white
tails star alliance logo has been used.
Sky team was founded in June 2000. 630 million is Their annual passenger count, it is the
second largest of the three major alliances. Sky team is only consist of 19 carriers from the
five continents. With reference to the year 2019, Sky team flies only up to more than 175
countries and it operates more than 14500 daily flights. This alliance is only having 750
lounges. The aim of the sky team is towards the powering up the most seamless customer
journey of the global alliance. (Musteen, M., 2016). Sky team offers the most comprehensive
priority services to any alliance which is easy and efficient in transfers and also gives
opportunity to all member airlines for the purpose of earning and redeeming their miles. It
does not able to grow their team members at the international level in a very broad spectrum.
From the perspective of world, it only offers one thousand thirty six plus destinations which
is very small in number as compared to others. Sky team offers the only 175 destination
countries. There are only twenty airlines which are the part of the Sky team. It includes
Aeroflot, aerolíneas argentinas, Aeromexico, Air Europa, Air France, Alitalia, China
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