Both airways later entered the SkyTeam alliance after the fusion of KLM and Air France in 2004. A complicating factor is that of origin-destination management (“O&D management”). Someone purchasing a ticket from Melbourne to Sydney (for instance) for A$200 is competing with someone else who wants to fly Melbourne to Los Angeles via Sydney on the same flight, and who’s prepared to pay A$1400. Should the airline choose the $1400 passenger, or the $200 passenger plus a potential Sydney-Los Angeles passenger willing to pay $1300?
Alliances of airlines coordinate their passenger service applications (corresponding to lounges and frequent-flyer packages), offer particular interline tickets and often have interaction in extensive codesharing (generally systemwide). These are increasingly built-in enterprise combinations—sometimes together with cross-equity preparations—by which merchandise, service requirements, schedules, and airport facilities are standardized and combined for greater effectivity. One of the first airlines to begin an alliance with another airline was … Read More