ABSTRACT
Dealing with excess capacity has been one of the main organi zational problems for airline management. One approach has been through n.ergers, which are often disguised bank ruptcies. However, mergers run up against the issue of national autonomy and sovereignty and, though to a much lesser extent, possible restriction on anti-trust grounds. One way around this has been the creation of global alliances, whereby two or more airlines continue as separate commercial entities but develop code-sharing arrangements so that there is some integration. It is curious that in an era of deregulation and intensifying competition, such collusion should be viewed as legitimate, and even encouraged by governments.
