The dynamics of airline alliances

This paper explains the dynamics of airline alliances. Using a system dynamic approach we shall first describe the driving forces behind the formation of alliances before going on to examine the inherent stability of alliances, both internally and externally. Understanding the dynamics of alliances can be useful in two ways. Outwardly, it can help in the thinking up of future scenarios which is something that is especially important to airlines that are looking for an appropriate alliance group but also for established groups looking for new members. Inwardly, such understanding is crucial as far as existing members of alliance groups are concerned when it comes to managing the alliance and achieving better performance.