This research argues that the bad impact of the airline alliances is getting worse everyday. This essay is about how airline alliances can threaten and endanger the entire world, especially passengers and communities, travel agencies and employees. The disadvantages of airline alliances can be removed in three ways that include establishing a supranational government organization, creating a communication platform and using antitrust laws.
The advent of global airline alliances in the 1980s gave rise to concerns that increased monopoly power of major carriers would lead to large and sustained producer surpluses. Airline alliances take many forms and provide varying benefits and risks to participating air carriers, as well as other stakeholders such as passengers, communities, travel agencies and employees. The most important consequence of an Airline alliance is the fact that supranational government organizations cannot yet match the power of supranational alliances, which have seized the wonderful occasion to engage in lawless activities recently. The risks and impacts of Airline alliances seem to outweigh the advantages of Airline alliances. Few articles researched on the bad effects of Airline alliances so far.Discuss about airline alliances bad effect in passengers, communities, travel agencies and employees and then suggest these stakeholders how to avoid the risks and impacts of airline alliances.
The bad effect in passengers
Reduce schedules and increase fares on passengers who fly on their planes. Consumers have an incorrect expectation because none of those services requires airline alliances. The major global airline alliance is to solidify the oligopoly of their participants, and to drive smaller non-participants and even large non-aligned airlines out of business.Remaining airlines can raise prices, while travelers are offered fewer choices Serious dangers for passengers if the ultimate outcome is an oligopoly that leads to reduced service quality and higher prices.
The bad effect on communities
Alliances seem to have grown into these giant organizations Little regard for the communities and passengers. Built some barriers to entry in airline industry such as financial barrier and priority obstacles. Airline alliances make the benefit for both sides:Pure hypocrisy and greedy behavior, as the airlines are search for even more special treatment and subsidies from governments. Use economies of scale for the airline members to achieve massive procurement savings, cutting costs by sharing facilities and allowing an expansion of their routes through code-sharing.
The bad effect travel agencies
Airline alliances are bring shivers among travel agencies as they worry about reduced to a minor role and low profit Travel agencies also select their cooperative alliance for competitive advantage because restricted by alliance. Besides, Some internet companies who want share this market by their advantage such as Orbitz.com and travelocity.com; The three biggest alliance developed their ticket system and website for selling their tickets. Small travel agencies are closing or going bankrupt in droves.
The bad effect on employees
Decreases opportunities for job growth.
Reduces security for employees through work force reductions.
For example, Delta Air Lines & Airways-Delta merger.
Market of aviation isn’t experiencing overcapacity; it’s just dislocation.
The airlines just find an excuse to terminate excess workers for reducing expenditures.
Difficult to pin down on merits or demerits.
The negative effects outweigh the positive effects.
Threatening the entire world, particularly on the traveler welfare problem, public benefit topic, travel agencies revenue, and rights of the employees.
Establishing a supranational government organization
Creating a communication platform
Using anti-trust laws.
Essay on Airline Portfolio: Delta Air Lines Analysis
1421 Words6 Pages
Delta Air Lines began in the early 1920’s as a crop dusting operation, known as the Huff Daland crop dusting company, and was based out of Macon, Ga. This was the first agricultural flying company in existence at the time and grew into the world’s largest privately owned fleet of aircraft (18 planes) by the mid 1920’s. At the turn of the decade, co-founder C.E. Woolman lead a movement to purchase Huff Daland and re-branded the company as Delta Air Service, named after the Mississippi River Delta region the company would navigate.
Throughout the 1930’s, the company operated various mail and passenger routes between Florida, Texas, South Carolina, Georgia, and even an international route to Peru. By the middle of the century, Delta had…show more content…
Delta merged with Northeast Airlines, began flying routes from Atlanta to London, and managed steady operation and growth post deregulation despite many other airlines filing for bankruptcy.
As the new century unfolded, Delta Air Lines continued exponential growth becoming one of the largest airlines in the country. A merger with Western Airlines in 1987, the acquisition of Pan Am’s transatlantic routes in 1991, and a final merger with Northwest Airlines in 2008 meant Delta now had routes all over the world. Delta like many other airlines faced very difficult times post 9/11 and during the recession. The airline made significant cost improvements across its operation and the merger with Northwest Airlines ended up pushing the airline back into profitable business.
From the humble financial portfolio as a crop dusting outfit in the mid twentieth century, to the multi-billion dollar portfolio of a major airline in the twenty first century, Delta Air Lines has risen as a successful business. The airline industry is directly affected by outside economic conditions and is also cyclical in nature. These factors make it very difficult for airlines to make predictions to stay financially afloat. Delta has ridden the bumpy path of the last twenty years and managed to survive. In the past twenty years there has been many events that