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WOW and SkyTeam Cargo: An In-depth Analysis of Strategic Alliances for Air Cargo Carriers and The Impact on Cargo Airlines' Operations and Success von Smeritschnig, Florian (eBook)

  • Erscheinungsdatum: 01.06.2013
  • Verlag: Anchor Academic Publishing
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WOW and SkyTeam Cargo: An In-depth Analysis of Strategic Alliances for Air Cargo Carriers and The Impact on Cargo Airlines' Operations and Success

In the airline industry, the formation of highly integrated strategic alliances started during the 1990's. Thereby, Star Alliance became the first global player when passenger airlines faced deregulation, and wanted to support their growth and expansion in international markets. For cargo companies, this type of integration came around later, namely in the beginning of 2000. As a result of the increased co-operation, major alliances were formed with the launch of SkyTeam Cargo and WOW. In the dawn of the new century, these alliances should lay the cornerstone for the achievement of a long term success through synergy effects, and higher competitiveness in terms of the individual and the group. A decade later, WOW and SkyTeam Cargo have evolved in different directions but, not all members or ex-members are pleased about the results. Strategic alliances in air transport have been studied widely but, most of the recent publications only cover the passenger side in this business. There are a lot of information and statements about the benefits that alliances can bring to ist members. But, the review of the literature shows that research is very sparse when it comes down to the evaluation of the actual impact of alliance integration on air cargo carriers' standing. The objective of this book is to analyze and interpret the impact of a strategic alliance on cargo airlines' revenue-tonne-kilometres key figures (provided by Airline Business 1998-2010), and market share developments. The author's aim is on the one hand, to answer the question if air cargo operators did profit from alliance integration, and on the other hand, to give the reasons for this development. Besides, the book gives an overview about the market's environment, the characteristics of air freight, and the history of WOW and SkyTeam Cargo. Further, the additional questions are discussed in detail: - How did carriers react to the challenges and opportunities in the market? - What are the main benefits or disadvantages for alliance members? - What major challenges do (prospective) members face in an alliance? - What are the core arrangements and prerequisites for alliance integration? - Is there a common success, are there stability factors and why do alliances fail? - What alternatives are there to alliance formation Florian Smeritschnig was born in Vienna, Austria in 1989. Among the top 10 students of his year (out of more than 5700), he obtained the bachelor degree in Business Administration at the Vienna University of Economics and Business, where he specialized in


    Format: PDF
    Kopierschutz: none
    Seitenzahl: 83
    Erscheinungsdatum: 01.06.2013
    Sprache: Englisch
    ISBN: 9783954895540
    Verlag: Anchor Academic Publishing
    Größe: 1734 kBytes
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WOW and SkyTeam Cargo: An In-depth Analysis of Strategic Alliances for Air Cargo Carriers and The Impact on Cargo Airlines' Operations and Success

Text Sample: Chapter, The Early Days: SkyTeam Cargo was founded in September 2000 as a separate arm of the passenger airline alliance SkyTeam which itself has just been incorporated three months earlier. The founding members Aeroméxico Cargo, Air France Cargo, Delta Air Logistics and Korean Air Cargo were soon to be followed by Czech Airlines Cargo and Alitalia Cargo in 2001. In the same year, Air France Cargo, Delta Air Logistics and Korean Air Cargo launched the US Cargo Sales Joint Venture in Atlanta. With even tighter integration, they hoped to offer customers the benefits of a combined sales force, a centralized reservation and service center, a comprehensive route network and a common product line for US export shipments. The joint venture used ist own IT system, revenue management and customer database. Both the wording and the appearance of the newly formed SkyTeam Cargo differed from the one and only competing alliance WOW. In 2002, Delta Air Logistics chief Anthony Charaf noted, that 'they'd rather be small and effective than large and ineffective.' On the other hand, unlike WOW, the Air France/Delta-led partnership intended to embrace all members of the SkyTeam passenger alliance, provided they agree to ist overall marketing and product philosophy. Over the coming years this strategic concept led to fast growth in terms of members and broad geographical presence., Rapid Growth: Although the members, too, were forced to adapt capacity to meet demand in the post-September 11 environment, the alliance did not ground any freighter aircraft. In 2002, the six present airline members represented a fleet of 1,103 aircraft, including 31 dedicated freighters operated by Air France Cargo and Korean Air Cargo. Between 2002 and 2003, Air France Cargo took delivery of four 747-400ERF as the launch customer for Boeing. Similar to WOW, SkyTeam Cargo harmonized ist array of products with a few exceptions (such as Delta's Dash express offering within the U.S.) and additionally (in contrast to WOW) unified the brand names by adopting the ones already established by Air France Cargo. Coincidentally, with the joint venture in Atlanta that marketed capacity out of the United States and an already available joint express product (Equation) in Air France's European route network, efforts to harmonize information technology as well as the implementation of single roof airport handling were well under way. A particular focus was set on the increase of the higher-value joint time-definite products. Following the merger of Air France and KLM, KLM Cargo joined SkyTeam Cargo in 2004. Just one year later, Air France Cargo and KLM Cargo merged and started to operate under one single brand name AF-KL Cargo. As integration continued, SkyTeam Cargo was moving towards a 'storefront strategy', the storefront being the SkyTeam Cargo brand. For international shipments, forwarders would contract business via 'the banner of SkyTeam Cargo' rather than through individual member carriers. With KLM's entrance into the alliance, the venture now had seven major cargo hubs, including Amsterdam, Mexico City, Rome, Seoul, Atlanta, Prague, and Paris-Charles de Gaulle as well as a total cargo network of more than 500 destinations in 100 countries. In 2005, Northwest Airlines Cargo joined the alliance and in 2008 Delta Air Lines acquired Northwest Airlines; both companies merged under the Delta Air Lines brand. In 2010, China Southern Cargo joined the alliance and recently in May 2011 Aeroflot joined SkyTeam Cargo as the 9th full member. Even though the integration process and the growth seemed to be happening at a higher pace than at WOW, SkyTeam Cargo encountered similar challenges. In 2005, Air France Cargo executive vice president Marc Boudier said that the member carriers do compete against each other in some markets. He added that member carriers sometimes have to engage into agreements with carriers outside SkyTeam, even wi

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