ABSTRACT
Near the end of World War II, 52 nations negotiated economic regulations to govern international air transportation. Rather than comprehensive standards, nations chose to enact tailored, but usually highly restrictive, agreements between countries leading to thousands of these “bilateral” agreements. Coinciding with a broad commitment to economic deregulation in the late 1970s, the US pushed for the liberalization of international markets that it believed would benefit consumers and foster air travel growth. After a slow start, many world regions have reduced restrictions on airline operations. Most of the original national flag carriers were state-owned and controlled but frequently became bloated, inefficient, and non-competitive resulting in failure or either partial or full privatization. The world’s largest full-service network carriers are members of global alliances designed to increase market reach and offer customers seamless global travel. This chapter considers the nature of these alliances, the benefits, and the costs of membership to both the airlines and the traveling public. Finally, mergers and acquisitions accelerated in the 21st century promising economic stability. The COVID-19 pandemic upended a decade of relative prosperity. Consolidation and the eventual emergence of true multinational airlines, as has occurred in other large industries, maybe the future of the airline industry.
Upon completion of this chapter, you should be able to:
