Alliances are finished says OAG

Airlines which are focused purely on traditional alliance models may have taken their eye off the ball as rapid changes take place, according to OAG, which claims to be the market leader in aviation intelligence.

OAG has published ‘The Fight for Global Markets – Is Three the Magic Number?’ 

John Grant, EVP of Data and Market Intelligence, said: “Alliances are no longer the only means of international competition.  Increasingly joint ventures, equity stakes and less formal partnerships are being used, all of which challenge existing structures and operations.  There are currently more airlines than can realistically exist and in a truly global market.”

“The global aviation outlook is transforming and there have to be changes to the business structure, the key players and shape of the industry.  Alliances are not a long-term solution – they are a fixed solution which have run their course for many circumstances.”

OAG’s report explores how dominant airlines have arisen and considers the academic label ‘Rule of Three’, whereby industries are dominated by three large players competing alongside smaller market specialists.  He cites the US as an example where American, Delta and United, which together operate 59% of all US seat capacity.  In the Gulf it is Emirates, Etihad and Qatar.  In Europe you have Air France-KLM, Lufthansa Group and IAG.  www.oag.com

Index/Home page
 

OUR READERS' FINEST WORDS (All times and dates are GMT)

All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum