ABSTRACT
In the second half of the 1990s the airline industry was characterised by a frenzy for inter-airline alliances of various kinds. The most frenetic period of alliance making was triggered by the deteriorating financial performance of international airlines as they were hit first by the crisis in the tiger economies of East Asia from late 1997, then by the slowdown in some European states in 1998 followed by the rapid escalation of fuel prices in 1999. Airline Business in June 1998 recorded 502 separate interairline alliances, 32 per cent more than a year earlier. As new alliances were being formed old ones were being broken up. The most notable divorce occurred in June 1999 when Delta abandoned its partner Swissair and its partner of ten years, the Atlantic Quality alliance. A few months later Austrian Airlines deserted the same alliance and announced its adhesion to the rival Star grouping. Equally dramatic was the sudden collapse in May 2000 of the relatively young but troubled alliance between KLM and Alitalia.
