Travel Reference
In-Depth Information
While there are signs of a shift in the balance of investment capital in the
hotel industries from West to East as emerging Asian hotel groups target key
investments in Europe and Australia (Jones Lang LaSalle Hotels, 2010),
European/North American corporate dominance of the global airline indus-
try remains particularly marked. Here, the rapid expansion of strategic global
alliances (allowing airline corporations to avoid anti-trust legislation) has
consolidated the centralisation of control in the hands of a few mega-carriers
based in Europe and North America (with the exception of Singapore Air-
lines). Airline deregulation in the US in 1978, and more recently in Europe in
1997, brought with it a proliferation of computer reservation systems, such
as SABRE which is owned by American Airlines, through which large mega-
carriers derive considerable revenue and market share (Clancy, 1998: 138).
Thus, despite the existence of almost 400 alliances involving 170 differ-
ent airlines, four 'mega-alliances' control around 70% of the world market
(Endo, 2006: 605). The largest of these, the Star Alliance (whose 26 member
airlines include three of the world's largest airlines (Lufthansa, Singapore
Airlines and United Airlines) carries nearly 650 million passengers to 193
countries, and has combined revenues of US$173 billion (Star Alliance, 2012,
2014). As recently as the late 1990s, 14 of the world's top 20 airlines, ranked
by passenger-kilometres flown, were based in rich industrialised countries.
The remaining six were all based in East Asia (Cathay Pacific and Singapore
Airlines are also amongst the top 100 TNCs headquartered outside of the
core industrialised countries in the West (UNCTAD, 1999). Despite the exis-
tence of regional carriers in the Caribbean (BWIA, Air Jamaica), American
Airlines sold 65% of tickets to this region in 1995 (Honey, 1999: 37). In addi-
tion to growing competition from 'low-cost carriers' such as Ryanair, which
now represent 26% of the global market (Centre for Aviation, 2012), there
are signs that North Atlantic dominance has started to wane as a result of
the rapid growth of global players in China and the oil-rich Gulf states.
Indeed, the growing strength of China's aviation industry was signalled by
the continued refusal of Chinese airlines to comply with the EU's Emissions
Trading Scheme (Wang, 2012). According to the IATA, 50% of the global
aviation industry's aggregate profits in 2011 were earned by Chinese airlines,
whilst three of the world's 10 largest IATA member airlines, ranked by pas-
senger kilometres flown, are now based there (IATA, 2012).
The concentration of ownership has also proceeded apace in the European
tour operator sector in the context of widening and deepening EU integration
and the associated (yet uneven) regulatory convergence (Bywater, 1998). In
2000, 72% of charter seats were controlled by just four airlines (Airtours
International 18%, Britannia 22%, Air 2000 16%, JMC Airlines 16%, as well
as Monarch, whose 18% is increasingly controlled by Cosmos), each of which
is affiliated to one of four major tour operators (Travel Weekly, 24 July 2000: 8).
Such dominance is a reflection of the wider European tour operations sector
in which it is estimated that up to 80% of the outbound package travel market
Search WWH ::
Custom Search