ABSTRACT
This chapter examines the nature of the franchising contract, and analyses its legal implications for the airline industry. One of the marketing initiatives to emerge in the airline industry is franchising. In its contemporary form, franchising has permeated a wide spectrum of businesses, introducing a sophisticated business relationship between two parties (the franchisor and the franchisee), thereby creating a contractual relationship. The application of the principles of franchising fits in well with the modern exigencies of airline business, where the brand image developed and projected by a highly successful airline has become of increasing importance to passengers, thus making an airline’s logo a marketable quantity. A notable example of franchising in the European airline business is British Airways, which had six franchising agreements in the year ending March 1996. In 1996, the six franchisees, most of which operated under the name British Airways Express carried 3.4 million passengers to 80 destinations.
