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Airline alliance

An airline alliance is an agreement between two or more airlines to cooperate for the foreseeable future on a substantial level.

The degree of cooperation differs between alliances.

Table of contents
1 Benefits/Costs
2 Hurdles to take
3 Global players


Benefits might consist of:

Benefits for the traveller might be: Disadvantages for the traveller might be:

Hurdles to take

The abilities for airlines to form an alliance are often restricted by laws and regulations or subject to approval by authorities. Anti-trust laws play a large role. Sometimes political quid pro quo between governments is at hand.

Also landing rights may not be owned by the airlines themselves but by the nation in which their head office resides. If an airline loses its national identity by merging to a large extent with a foreign company, existing agreements may be declared void by a country which objects to the merger.

The first large alliance which is still functioning started in 1989, when Northwest and KLM Royal Dutch Airlines agreed to code sharing on a large scale. A huge step was taken in 1992 when The Netherlands signed the first open skies agreement with the United States, in spite of objections uttered by the European Union authorities. This gave both countries unrestricted landing rights on each others' soil. Normally landing rights are granted for a fixed number of flights per week to a fixed destination. Each adjustment takes a lot of negotiating, often between governments rather than between the companies involved. The United States was so pleased with the independent position that the Dutch took versus the E.U. that it granted anti-trust immunity to the alliance between Northwest and KLM. Other alliances would struggle for years to overcome transnational barriers or still do so.

Global players

The four largest alliances are:

Star AllianceoneworldSkyTeamNorthwest/KLM Royal Dutch Airlines/Continental
Passengers per year *112 million85 million56 million68 million
Market share *23%17%13%11%
Participants Air Canada
Air New Zealand
Austrian Airlines
British Midland
Lauda Air
Scandinavian Airlines
Thai Airways International
Tyrolean Airways
Varig Brazilian Airlines
Aer Lingus
American Airlines
British Airways
Cathay Pacific
Swiss International Airlines
Air France
CSA Czech Airlines
Korean Air
KLM Royal Dutch Airlines
external no dedicated site

* = source IATA / september 2002 

As the table shows the four alliances together fly 64% of all passengers travelling each year.

Note: market share and number of passengers are quite unrelated. Long haul international flights are much more profitable than shorter national flights (where competition often is even stronger). Freight transport is also a major contributor to profits.