ABSTRACT
This chapter presents air cargo alliances and mergers, focusing on those that have been agreed between airlines, excluding forwarders and integrators. Alliances are, subject to governmental scrutiny to assess whether competition is impaired, and if this is the case conditions might be attached to the alliance. P. Gronlund and R. Skoog argue that air cargo alliances are a response to marginal cost pricing and integrator power. Some alliances are cemented with a minority stake exchanged between two carriers, and these will be addressed under alliances below. The greater the depth of agreement, the higher is the possibility of alliances yielding tangible benefits. Closer cooperation is aimed at increasing revenues, and can also lead to cost reduction. A prorate agreement is a means of sharing the revenue generated from a multi-sector service involving more than one airline. Cross-border merger activity has been limited up to now to within trading blocs such as the European Union.
