Do business class air fares capture added value for airline alliance membership?

Publisher:
Palgrave Macmillan Ltd.
Publication Type:
Journal Article
Citation:
Journal of Revenue and Pricing Management, 2005, 4 (3), pp. 219 - 227
Issue Date:
2005-01
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Over the past decade, international full service airlines have moved strongly towards alliances as an organisational form. This reflects, at least in part, the inability of the industry to rationalise through cross-border mergers and acquisitions, as the international traffic rights required for operation are tied to the Chicago Convention of 1949, and generally require the majority of an airline's ownership to remain in the hands of its nationals. While airline sales teams identify alliance membership as a critical sales tool, the value of this alliance membership is not always perceived as equally valuable by customers, nor is it captured by airline pricing models. This paper uses analysis of net pricing in the highly contested Sydney to London market to demonstrate that the perceived value from alliance membership is not captured in business class airfares.
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