Travel Reference
In-Depth Information
Driven by regulatory restrictions on market access, ownership and control, and the
deregulation and liberalisation of air travel markets in the late 1970s and early 1980s, membership
of an international airline alliance has today become a 'key component of business strategy for
many airlines, and a means of differentiating member airlines from low-cost competitors in terms
of the quality of service offered' (Tiernan, Rhoades and Waguespack 2008: 99). In essence,
international airline alliances have further consolidated the industry and have served to centralise
the balance of power into a relatively small number of airlines who dominate the three most
signifi cant international airline alliances, namely Oneworld, Star Alliance and Sky Team. The
following section now provides an overview of theoretical explanations that underpin the
development of such collaborative forms.
Theoretical explanations of collaboration
Although a large number of theories exist that help clarify understanding of collaboration, Wood
and Gray (1991) share the view that nearly all such theories acknowledge the contribution of
environmental complexity, uncertainty, and turbulence as common problems faced by
organizations of all shapes and sizes. As such, collaboration is believed to be that vehicle most
suited to reducing these common problems to manageable levels. Such a view, however, does
tend to fuel the debate that collaboration is a secondary-reactive rather than a primary-proactive
strategy with it being viewed more as a 'next-best alternative' rather than as a strategy of choice.
This is certainly a question worthy of asking those airlines that are already members of
international airline alliances as well as those that have yet to join. Accepting that collaboration
can, however, be explained by a variety of theoretical perspectives and that no single perspective
predominates, two recent reviews in the context of tourist destinations, seek to synthesize the
multitude of theoretical explanations in the wider literature. The fi rst by Beritelli (2011) studies
cooperation at different levels and identifi es six approaches: game theory; rational choice theory;
institutional analysis; resource dependence theory; transaction cost economics; social exchange
theory. The second, by Fyall, Garrod and Wang (2012), refers to similar studies but identifi es fi ve
theoretical groupings: resource-based theories; relationship-based theories; politics-based
theories; process-based theories; chaos-based theories. Each theory is introduced below with
questions raised as to the potential contribution of each in explaining the emergence of
international airline alliances.
Resource-based theories
Resource-based theories are dominated by resource dependency theory which is built upon two
assumptions: the fi rst that resources are scarce and the second that organizations have suffi cient
power to leverage such resources (see Emerson 1962; Ulrich and Barney 1984; Barney 1991;
Hamel and Prahalad 1994; Faulkner and de Rond 2000; Donaldson and O'Toole 2002). In other
words, organizations rely on each other due to their endowments and their differing contextual
environments (Beritelli 2011) where power-confl ict assessment is a key determinant as to
whether organizations compete or collaborate with others (Fyall
et al
. 2012). One of the consi-
derations for organizations contemplating collaboration, therefore, is the extent to which they
are prepared to concede autonomy as there are instances where collaboration may increase levels
of uncertainty due to new inter-organizational relationships and dependencies (Wood and Gray
1991). The desire by many airlines to attain global market reach coupled with their insuffi cient
resource endowments to achieve such a goal have historically been the main drivers of collabora-
tion to the extent that a certain loss of autonomy has been a price worth paying, to date at least.
