ABSTRACT
This chapter deals with two elements of contemporary aviation business practice that are most likely to impact upon the operating airline manager: alliances and the low-cost carrier (LCC) phenomenon. It explores the competitive advantage of the LCC. An airline seeking to be a full-service carriers have a higher cost structure than an airline which seeks the LCC space. The chapter focuses on areas that are of more immediate concern to the operating manager: the business practices that surround the functionality of alliances and low-cost carriers. Airlines were able to set fares on a trip basis by forecasting traffic in both service and fare classes. The airlines have endeavoured to optimize the relationships that membership of a Global Alliance allows, such membership does not exclude commercial relationships, even amounting to joint operations, with other airlines who may not be in any alliance, or with carriers from other alliances.
