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Global airline alliances: international regulatory issues

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  • Oum, Tae Hoon
  • Yu, Chunyan
  • Zhang, Anming

Abstract

The air transport industry has remained one of the most regulated and restrictive industries in international trade. Domestic deregulation and liberalization have been progressing at an uneven pace across countries, and liberalization of the international markets has yet to overcome numerous obstacles. Air carriers, on the other hand, need to build up an extensive global network to realize economies of scope and density and to meet consumer demands. To accomplish this, they need to have foreign partners. However, ownership restrictions do not allow for cross-country mergers or takeovers. As a result, alliances have become, and will remain in the near future, the primary means for expanding and strengthening airline global service networks. Alliances have provided a way for carriers to mitigate the limitations of bilateral agreements, ownership restrictions, and licensing and control regulations. In effect, both airlines and governments consider international alliances to be the second best solution to achieve free trade in world aviation. This paper discusses regulatory issues related to international airline alliances. Section 1 provides an overview of the current regulations surrounding alliance frameworks, and Section 2 contains a synthesis of economic analysis of regulatory concerns for international airline alliances. Section 3 discusses international coordination in regulations of airline alliances, and Section 4 provides a summary and conclusion.

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  • Oum, Tae Hoon & Yu, Chunyan & Zhang, Anming, 2001. "Global airline alliances: international regulatory issues," Journal of Air Transport Management, Elsevier, vol. 7(1), pages 57-62.
    • Handle: RePEc:eee:jaitra:v:7:y:2001:i:1:p:57-62
    DOI: 10.1016/S0969-6997(00)00034-X
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    Cited by:

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    2. Never, Jan & Suau-Sanchez, Pere, 2020. "Challenging the interline and codeshare legacy: Drivers and barriers for airline adoption of airport facilitated inter-airline network connectivity schemes," Research in Transportation Economics, Elsevier, vol. 79(C).
    3. Brueckner, Jan K. & Proost, Stef, 2010. "Carve-outs under airline antitrust immunity," International Journal of Industrial Organization, Elsevier, vol. 28(6), pages 657-668, November.
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    5. Piotr Niewiadomski, 2013. "International airline groups in Africa," Global Development Institute Working Paper Series ctg-2013-36, GDI, The University of Manchester.
    6. Luis Miguel Bolívar & José Luis Roldán & Ignacio Castro-Abancéns & Cristóbal Casanueva, 2022. "Speed of International Expansion: The Mediating Role of Network Resources Mobilisation," Management International Review, Springer, vol. 62(4), pages 541-568, August.
    7. Duval, David Timothy, 2008. "Regulation, competition and the politics of air access across the Pacific," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 237-242.
    8. Zhang, Yahua & Sampaio, Breno & Fu, Xiaowen & Huang, Zhibin, 2018. "Pricing dynamics between airline groups with dual-brand services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 46-59.
    9. Fan, Terence & Vigeant-Langlois, Laurence & Geissler, Christine & Bosler, Björn & Wilmking, Jan, 2001. "Evolution of global airline strategic alliance and consolidation in the twenty-first century," Journal of Air Transport Management, Elsevier, vol. 7(6), pages 349-360.
    10. Shaw, Shih-Lung & Lu, Feng & Chen, Jie & Zhou, Chenghu, 2009. "China’s airline consolidation and its effects on domestic airline networks and competition," Journal of Transport Geography, Elsevier, vol. 17(4), pages 293-305.
    11. Burghouwt, Guillaume & Hakfoort, Jacco, 2001. "The evolution of the European aviation network, 1990–1998," Journal of Air Transport Management, Elsevier, vol. 7(5), pages 311-318.
    12. Wen, Yuh-Horng & Hsu, Chaug-Ing, 2006. "Interactive multiobjective programming in airline network design for international airline code-share alliance," European Journal of Operational Research, Elsevier, vol. 174(1), pages 404-426, October.
    13. Grauberger, Waldemar & Kimms, Alf, 2016. "Revenue management under horizontal and vertical competition within airline alliances," Omega, Elsevier, vol. 59(PB), pages 228-237.
    14. Beria, Paolo & Scholz, Aaron B., 2010. "Strategies and pitfalls in the infrastructure development of airports: A comparison of Milan Malpensa and Berlin Brandenburg International airports," Journal of Air Transport Management, Elsevier, vol. 16(2), pages 65-73.
    15. Castiglioni, Marco & Gallego, à ngeles & Galán, José Luis, 2018. "The virtualization of the airline industry: A strategic process," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 134-145.

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