Do Joint Ventures Under the Oneworld Airline Alliance Benefit Individual Airlines?

Direct Investment and Collaboration
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Direct Investment and Collaboration
Background
The issue concerning whether or not airline alliances generate benefits for all stakeholders emerges as airlines are faced with increasingly complex operational and regulatory challenges. Specifically, airline alliances were primarily triggered by the need for airlines to adapt to the changing global marketplace (Seo, 2020). Increasing competition in the airline industry, compounded by regulatory and cost constraints, airlines began to seek out ways to improve their performance and better meet the needs of their customers. Airlines sought improvement by forming alliances with other airlines, creating entities such as Oneworld Alliance. These alliances allowed airlines to share resources and expertise, reduce operational costs, access a broader range of destinations and flight options, and navigate a complex regulatory landscape. Overall, the formation of airline alliances such as Oneworld was driven by the need for airlines to remain competitive and provide value to their customers in a rapidly changing industry.
Issue
Do joint ventures under the Oneworld Airline Alliance benefit individual airlines?
Analysis
A review of the Oneworld Airline Alliance case study shows that joint ventures between airlines do indeed benefit individual airlines. First, the alliance allows airlines to share the costs of operating flights on specific routes, making those flights more profitable for both airlines. For example, airlines in the network can leverage unique capabilities such as baggage handlers and aircraft handling equipment belonging to partners dominating particular international airports. The airline alliance also allows airlines to offer flexibility and convenience in their destinations and flight schedules, attracting more passengers and increasing revenue. According to the case study, the alliance is especially beneficial in light of government regulation on international and domestic routes. Additionally, joint ventures provide airlines with opportunities to improve their operations by sharing best practices and expertise (Göv, 2020). For example, the case study reveals how members of the Oneworld Alliance generate efficiencies from their union by sharing competencies in areas such as arrival processing. Overall, joint ventures are a valuable way for airlines to improve their performance and better compete in the marketplace.
Conversely, alliances such as Oneworld could also present several potential disadvantages. One disadvantage is that the airline alliance potentially...