Airline Codeshare Alliances
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Airline Codeshare Alliances Marketing Boon and Revenue Management Information Systems Challenge Codeshare alliances are a popular instrument for airlines to grow profitably. This paper juxtaposes the challenges that they create for analytical information systems on the one hand and their motivation from a marketing perspective on the other. In this regard, revenue management systems as a central tool of the ticketing process are of particular interest. Complementary codesharing reduces alliance-wide revenues by up to 1 %. Losses disseminate over the whole network and increase with total demand and the degree of codeshare demand. Virtual codesharing causes losses of up to 1.5 % depending on the discount level offered by the marketing carrier and on the demand structure. Based on the findings, recommendations for airline management and future research are derived. DOI 10.1007/s12599-013-0262-8
1 Introduction
The Authors Max Gerlach M.Sc. () Prof. Dr. Catherine Cleophas Prof. Dr. Natalia Kliewer Department Wirtschaftsinformatik Freie Universität Berlin Garystr. 21 14195 Berlin Germany [email protected] Received: 2012-06-29 Accepted: 2013-02-14 Accepted after two revisions by Prof. Dr. Spann. Published online: 2013-05-04 This article is also available in German in print and via http://www. wirtschaftsinformatik.de: Gerlach M, Cleophas C, Kliewer N (2013) Codeshare-Allianzen bei Fluggesellschaften. Ein Segen für das Marketing und eine Herausforderung für Informationssysteme im Revenue-Management. WIRTSCHAFTSINFORMATIK. doi: 10.1007/s11576-013-0361-7. © Springer Fachmedien Wiesbaden 2013
Business & Information Systems Engineering
As competitive pressure increases, mergers and alliances are gaining popularity across all industries. A large and growing body of management research considers the topic; compare for example Ireland et al. (2002, pp. 413–446) for a discussion of the role of management in corporate alliances. At the same time, mergers and alliances provide new opportunities for information systems (IS) research: They pose challenges to communication and information consistency, and increase the size and complexity of decision support tasks, as discussed for example in Killing (1988, pp. 55–67). Many industries regard alliances as the appropriate framework to build more efficient and profitable business networks. Airline codeshare alliances are a typical example. They enable carriers to cooperate when trade and ownership regulations make other forms of cooperation impossible (Park 1997, pp. 181–195). According to de la Torre (1999, pp. 60– 75), the five main benefits of airline alliances are greater network reach, access to foreign markets, increased market penetration, higher traffic volumes and cost benefits due to synergy. From a marketing perspective, these benefits lead to potential gains through the extension of the product portfolio, improved customer relationship management, and the establishment of common sales policies across markets. 3|2013
In 2010, the three large airline alliances – Star All
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