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Strategic competition and cooperation
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Abstract(s)
Competition is often regarded as the ultimate solution for market efficiency. In certain
sectors, however, market imperfections together with scale and scope economies lead
market participants to establish some sort of cooperation efforts in order to maximize
the common benefit of the cooperating partners. We argue that this is increasingly the
case with the air transport industry. One reason for founding an alliance is to allow its
members to prepare themselves to be fit for competing in the global arena and to stay
strong in order to protect the home turf.
In this article we analyse the economic rationale behind strategic alliances in the air
transport sector, namely emphasizing the individual contributions and collective
benefits of airlines when merged within a specific alliance for cooperation purposes.
The several possibilities of cooperation agreements between air carriers are also
analysed, as well as some of their managerial implications.
Finally, the implications for tourism and the prospective medium-term trends for the
airline sector are also taken into consideration for the immediate future of this
competitive market, notwithstanding the competitive pressures ahead, namely the ones
stemming from IT innovation and increasing energy costs.
Description
Keywords
Tourism Air transport Competition Cooperation Strategic alliances . Escola Superior de Tecnologias e Gestão
Citation
Sarmento, M. & Teles, S. (2010). Strategic competition and cooperation. In Actas Proceedings 16º Congresso da APDR, Funchal (pp. 2600-2623). ISBN 978-989-96353-1-9