Singapore Case - the oneworld Airline Alliance

Baruch College

The oneworld Airline Alliance

Chapter 15 case study

Piatnytsia Olena

Marketing 3400

Professor Lynn Pyun

March 8, 2016

Statement of the problem(s) The oneworld Airline Alliance have many problems that they are facing. One of the major problems is rising costs. Oil costs more and there is a greater need for security since the events surrounding 9/11. Security is costly, which many passengers may not be aware of. This includes providing government agencies with advanced passenger information and ensuring the safety of cargo that is aboard the aircraft. Despite these rising costs, the airline still has to manage to keep their costs for passengers affordable. If passengers do not find their rates affordable, they can easily find a different flight from a different airline.

Another problem is the existence of price competition. Due to price competition, airlines can not notify passengers of increased costs because of discount airlines and the ability to compare the costs of flights with ease using the internet. Rather than flying one airline because the passenger finds it unaffordable, they can turn to a discount airline. It may not provide all of the amenities they desire, but it will be less costly. When looking for a flight, passengers can search the internet using price comparison engines. This will allow them to find the cheapest flight to their intended destination.

The recession has caused passenger demand to diminish, which is another issue. Many previous airline passengers have stopped flying because it has become too costly for them. Due to the decrease in demand, many airlines are adding capacity sparingly. Despite the recession, passengers are still traveling around the world. Therefore capacity should be made readily available on world wide flights. But, no airline has the finances or aircraft to cater to the entire world. This is why airlines should consider merging together.

Definition of Key Players and an Explanation of Why They are Key The government is a key player in this case. They are key because they play a major role when it comes to airline ownership. Throughout history the government has had some sort of control over airline regulations. Due to the government’s ownership, airlines were monopolies within the domestic markets, money losers, and recipients of government subsidies.

Another key player is the oneworld Alliance which is made up of twelve different airlines. This includes airberlin, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malaysian Airlines, Qantas, Royal Jordanian, and S7 Airlines. They are key because they allow passengers to earn travel credits, they advertise their affiliation, and they allow for cooperation among the different airlines.