petitive and make profits.Major carriers are producing low-fare offshoots such as US Airways Metro Jet and Deltas Delta Express. These carriers travel more frequently and usually cost a good deal less than the larger carriers. International low-fare carriers are expected to enter the US as well which should increase competition for carriers such as these. These new services have been very successful in attracting travelers, especially business travelers who are very sensitive to time constraints. Some critics, however, feel that these off-shoots are simply defensive measures rather than profit centers- only time will tell. Formation of Key Strategic AlliancesThe formation of alliances in the airline industry have helped both consumers and the airline industry immensely. According to James Goodwin, the CEO of United Airlines, various alliances have contributed around $200 million in additional revenues and cost savings. One of the most successful contributors to the additional revenues is the Star Alliance, of which Goodwin is a part of (Mooreman p.2). United Airlines, Luftsana, SAS, Air Canada and Thai Airways comprise the Star Alliance. This alliance is revolved around domestic carriers teaming with international carriers to gain an entry point into a new market. Included in this alliance is code-sharing which should provide a competitive advantage for alliance partners. Code-sharing makes it possible to book a passenger on one airline that allows them to fly on the other airline as well. In addition, a combination of benefits from frequent flyer programs will be available to consumers. Four of the worlds leading airlines have merged and are now known as Skyteam. Those involved are Aeromexico, Air france, Delta and Korean Air. This alliance is based on the premis that a competitive edge is gained in the airline industry by focusing on customers. This alliance caters to customer needs and demands and develops routes an...
