Globalization In The Airline Industry

Introduction

In this modern newly globalised world, the airline industry has begun garnering attention from consumers as a result of headlines surrounding controversial issues such as that of terrorism, excess capacity and recent strikes such as that of Lufthansa Airlines and Air France.

International air transport is less than a century old, but is now a major contributor to globalization and is continually reshaping itself to meet the demands of the economic and social integration that globalization engenders (Button, 2008). It is changing the framework through which the airline industry should be viewed – from a national perspective toward a more global one (Yergin et al, 2000). This idea of the world becoming a smaller place would not be

The most fundamental of these implications is the fact that increased travel is both a reason for and the result of, the global lifestyle (WTO, 1990). On top of the deregulation of the airline industry, Morley (2005) proposes that the forces driving globalisation are one of the primary reasons for these strategic alliance arrangements forming in the airline industry. As the travel market is becoming more and more volatile, with more consumer demand and competition reaching an all-time high on a global scale - airlines have had to establish away to reach more distances to meet the demands, and still remain dominant in the market – through network alliances. The joint development of these networks permits globalisation and speeds up the rate of expansion and supply of services (Ullrich,

Such competitive attitudes can easily be identified in the success rates in the business of low cost carriers, whose purpose in the market has been to reduce costs for the common consumer and deliver the same service – transporting consumers to and from destinations. Mitchell and Mills (2009) state that in 2008, low cost carriers carried approximately 579.5 million passengers, a 9% increase from the previous year. Sader et al (2012) propose that this growth of LLC “has been attributed to the globalization of the industry driven by market deregulation and open skies agreement” of airlines (Sader et al, 2012) and unlike other budget airlines, LLC aren’t subject to “high cost base and the tough regulatory environment” (Lavery,