ABSTRACT
The globalization strategies that have been evident in the international civil aviation sector in recent years are predicated on two other changes characterizing the industry over that period: the reduction in national state regulation of civil aviation and the widespread privatization of former state-owned airlines (see Button et al., 1998; ITF, 1992; Kassim, 1997; Lyth, 1997). The effects of these new operating conditions have been visible in several developments within the industry, of which three are most prominent. First, there has been a rapid growth in new operators (and new subsidiaries of established operators) entering the passenger airline market, primarily providing a ‘low-cost’ service via less heavily congested airports, but increasingly extending their activities to more established routes (AEA, 2000: 6; Air Transport World, 2000: 47). Second, a more general increase in competition has been experienced by established carriers, giving rise to major organizational restructuring to improve productivity and efficiency (Morrell and Lu, 2000). Third, among the major operators an accelerated search has taken place for a global presence in the passenger airline market, reflecting the greater profitability and growth potential of long haul compared to short haul traffic. Prominent in the last of these developments has been the development of strategic alliances between carriers located in different geographical regions. By mid-2000, over 570 alliances of one form or another existed in the industry, though of these just five1 global alliances accounted for over 57 per cent of the total world market in civil aviation (Airline Business, 2000).
