Star Alliance in 2020

Case Solution

Benjamin Gomes-Casseres, Jacob Judd
Ivey Publishing ()

Star Alliance, founded in 1997, was the first global airline network or constellation. Its aim was to move the aviation industry from a network of flexible bilateral agreements between individual airlines to a broader network of multilateral agreements between members. A wave of deregulation in the industry in the 1970s and 1980s that allowed free travel between countries led to the formation of three major global constellations: Star Alliance, Oneworld, and SkyTeam. These networks offered their members many benefits, such as cost sharing, administration of loyalty programs, and increased flight load. However, in early 2020, the COVID19 pandemic outbreak had a devastating impact on the aviation industry. Therefore, the focus of airline alliances shifted from greater connectivity between members to survival in the new global landscape. Would this strategy help airlines survive the COVID19 crisis? Was group competition necessary to be successful during a pandemic? His main concern was whether the powerful framework they created could help member airlines weather this crisis and regain their pre-pandemic financial stability.

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