courage competition in the different markets; this will serve as the catalyst for the carriers to look for what needs to be improved on their organization.Financial EffectProfitability for the airline carriers will increase. So far we have see a profit increase on the airlines operating in airline alliances. On KLM-Northwest, KLM posted a profit of $298 million as a result of the alliance. Lufthansa, member of the Star Alliance, reported an increase in their revenues of DM300 million. Basis for recommendationCompetition and quality of services will increase; costs will decrease as a result of the percentage of seats occupied on the flights. The alliances are the second best method to deal with the restrictions, cabotage and foreign ownerships policies that exist in the countries. Competition would decrease fares to show real marginal cost instead of the power of an airline in any given market. In general, the travelers will beneficiate of a greater choice of carriers and lower fares.RisksOne of the risks would be that safety regulations were not observed or became of a double standard nature to beneficiate certain carriers in specific. It is imperative for the United States to secure contracts from foreign airliners guaranteeing that they will be able to use their fleet in case of national emergency. Airlines will have to obey all local and international laws. The standards to be implemented are complicated to formulate and to implement. It will take a long time to implement and assimilate them. Timing will be a factor in the steps needed to he goal of Global Market....
