DOES PERTAINING TO A GLOBAL STRATEGIC ALLIANCE IMPROVE THE BOTTOM LINE?

Abstract

This study researched whether pertaining to a global strategic alliance brought significant benefits to the ‘bottom line’ of allied airlines. The study used two groups: a group of airlines which had joined one of three global alliances against a control group of airlines which had not joined any alliances. The research compared the net return of those two groups before and after airlines joined their alliances (or equivalent measure), as well as their relative net performance both in the short-term and in a longer term. Results showed a sensible deterioration in net profitability for the alliance group and a perceptible improvement in net profitability for the nonalliance group. The latter also differed from the former in having a positive relative net performance in the short-term.