Loading...

WOW and SkyTeam Cargo: An In-depth Analysis of Strategic Alliances for Air Cargo Carriers and The Impact on Cargo Airlines’ Operations and Success

©2013 Academic Paper 84 Pages

Summary

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

Excerpt

Table of Contents

1. Introduction
1.1. Research Questions
1.2. Methodology
1.3. Structure

2. Research Background
2.1. Market Environment
2.1.1. Challenges
2.1.1.1. Liberalization and Regulatory Environment
2.1.1.2. Integrators and Competing Business Models
2.1.2. Opportunities
2.1.2.1. Innovation in Air Cargo Transport
2.1.2.2. Market Facts and Numbers
2.2. Idiosyncratic Economics of Air Cargo Operations
2.3. Reactions of Air Cargo Carriers
2.3.1. WOW
2.3.1.1. Taking Off with High Hopes
2.3.1.2. Difficulties Getting Off the Ground
2.3.1.3. The Recent Years
2.3.2. SkyTeam Cargo
2.3.2.1. The Early Days
2.3.2.2. Rapid Growth
2.3.2.3. Status Quo and Outlook
2.4. Summary of WOW and SkyTeam Cargo

3. Literature Review – State of the Field
3.1. A Definition and Distinction of the Alliance Term
3.2. State of the Field
3.2.1. Strategic Alliances in General
3.2.2. Strategic Alliances in Air Transportation
3.3. The Concept of Strategic Alliances
3.4. Alliances in the Air Cargo Business
3.4.1. Driving Forces of the Alliance Decision
3.4.1.1. Get Exposure to Growth
3.4.1.2. Fight for Market Share
3.4.1.3. Synergies and Complementary Assets
3.4.1.4. Others
3.4.2. Alliance Advantages
3.4.2.1. Access to Regional Knowledge and Established Relationships
3.4.2.2. Organisational Learning and Innovation
3.4.2.3. Counteract Market Uncertainties and Volatility
3.4.2.4. Economies of Scale, Density and Scope
3.4.2.5. Market Power and Presence
3.4.2.6. Usefulness for Professionals
3.4.2.7. Advantages for Customers
3.4.3. Disadvantages
3.4.3.1. Result of Economies of Scale, Scope and Density
3.4.3.2. High Requirements
3.4.3.3. High Dependance
3.4.3.4. Other Drawbacks
3.5. Core Questions and Prerequisites for Alliance Integration
3.5.1. Value Creation and Distribution
3.5.2. Alliances as a Long Term Commitment
3.5.3. Foreseeing of Conflicts
3.5.4. Reciprocation in a Network of Alliances
3.5.5. Prerequisites for Successful Alliance Creation
3.6. Alliance Criticism and Other Cooperation Strategies
3.6.1. Criticism
3.6.2. Other Co-operation Methods
3.7. Challenges and Common Complications

4. Transition to Analytical Part

5. Analysis of Both Alliances’ Revenue-Tonne-Kilometres
5.1. Assumptions
5.2. Total Market and Peer Group
5.3. WOW and SkyTeam Cargo
5.3.1. WOW Alliance
5.3.1.1. Lufthansa Cargo
5.3.1.2. Singapore Airlines Cargo
5.3.1.3. SAS Cargo
5.3.1.4. Japan Airlines Cargo
5.3.1.5. WOW Conclusion
5.3.2. SkyTeam Cargo
5.3.2.1. Approach
5.3.2.2. SkyTeam Cargo Founding Members
5.2.3.3. Korean Air Cargo
5.2.3.4. Air France and KLM
5.2.3.5. Delta Airlines and Northwest Airlines
5.2.3.6. Aeroméxico
5.2.3.7. Alitalia
5.2.3.8. SkyTeam Cargo Conclusion
5.3. Comparison WOW and SkyTeam Cargo

6. Conclusion and Further Research Opportunities
6.1 Summary
6.2 Further Research Opportunities

References

Figure 1: Alliance Research Broken Down

Figure 2: Air Cargo Growth Rates (Source: Boeing)

Figure 3: Freight Yield 1989 – 2009 (Source: Boeing)

Figure 4: World Air Cargo Traffic in RTK (Source: Boeing)

Figure 5: World Air Cargo Growth (Source: Boeing)

Figure 6: Historical and Forecast Air Cargo Growth Rates (Source: Boeing)

Figure 7: Total RTK 1998-2010 from the 100 Largest Cargo Airlines (in Million), Source: Airline Business, compiled by the author

Figure 8: Total RTK 1998-2010 from All WOW Alliance Members (in Million) Source: Airline Business, compiled by the author

Figure 9: Total RTK 2001-2010 from All WOW Alliance Members (in Million) Source: Airline Business, compiled by the author

Figure 10: WOW Airlines RTK Market Share from 1998 to 2010, Source: Airline Business, compiled by the author

Figure 11: Total RTK 1998-2010 from the SkyTeam Cargo Core Members (in Million) Source: Airline Business, compiled by the author

Figure 12: Total RTK 2001-2010 from the SkyTeam Cargo Core Members (in Million) Source: Airline Business, compiled by the author

Figure 13: SkyTeam Cargo Core Member RTK Market Share from 1998 to 2010, Source: Airline Business, compiled by the author

„Aerodynamically the bumblebee shouldn't be able to fly, but the bumblebee doesn't know that so it goes on flying anyway.”

- Mary Kay Ash

1. Introduction

The formation of highly integrated strategic alliances in the airline industry started during the 1990’s with Star Alliance as the first global player, as 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 at the beginning of 2000. As a result of this increased co-operation, major alliances were formed with the launch of SkyTeam Cargo and WOW. Beginning at the dawn of the new century, these alliances should mark a cornerstone that enables long term success and survival through synergy effects and higher competitiveness individually and as a group.[1] Now, a decade later, WOW and SkyTeam Cargo have evolved, but in different directions and not all members or ex-members are content with the results.

1.1. Research Questions

The greatest change in corporate culture—and in the way business is being conducted—may be the accelerating growth of relationships based not on ownership but on partnership; joint ventures; minority investments cementing a joint marketing agreement or an agreement to do joint research … alliances of all sorts

- Peter F. Drucker[2]

Strategic alliances in air transport have been studied widely in recent publications, most of which just cover the passenger side of the business. There is a lot of information, statements and common knowledge about what benefits alliances can bring to its members, but a literature review leads to the fact that research is very sparse when it comes down to evaluating the actual impact of alliance integration on air cargo carriers’ standing.

illustration not visible in this excerpt

Figure 1: Alliance Research Broken Down

Strategic Alliances (WOW, SkyTeam Cargo) in Air Cargo Operations: It is the purpose of this book to analyze and interpret the impact of a strategic alliance on cargo airlines‘ revenue-tonne-kilometres (RTK)[3] key figures (provided by Airline Business 1998-2010) and market share developments. The goal is to provide answers to the questions if air cargo operators did profit from alliance integration and why that was the case or not? Can alliances create value for their respective members by increasing their market share in terms of RTK?

Additional questions that will be addressed in the process of answering these core questions:

- What are the main benefits and disadvantages for alliance members
- What major challenges do (prospective) members face in an alliance
- Are there common success and stability factors and why do alliances fail
- What alternatives are there to alliance formation

1.2. Methodology

In order to complete this research, a combination of different methodologies is used, based mainly on content analysis, literature review, the secondary data analysis including books, academic journals, data provided from inter-trade organizations, airlines, aircraft manufacturers and suppliers of aircraft manufacturers. In the first part of the book the alliance history and the environment is discussed using secondary data. The second part on the concept of strategic alliances in general and in the air cargo sector draws mainly on literature review and content analysis. After the literature review, the main purpose is to analyze specific revenue-tonne-kilometres derived from the Airline Business Cargo Surveys statistics on a year-to-year basis from 1998 till 2010. The revenue-tonne-kilometres data of the total market and of individual alliance members of both WOW and SkyTeam Cargo is extracted in order to serve as a basis for further analysis and also to be used to derive other market related figures. With the relevant data at hand, the market developments in terms of revenue-tonne-kilometres and respective growth rates are discussed, before each member carrier is analyzed on the basis of the absolute RTKs, the market share, the RTK growth rate, as well as on the global rank within the peer group (100 largest cargo airlines in terms of RTK) during the period under review. Additionally a compound analysis for both alliances is carried out.

1.3. Structure

In order to fulfill the goals of the research, this book is structured as follows:

Section one contains the problem statement that underlies this study. From there, different research questions are constructed. The section concludes with the proposed methodology that will be used to answer the research question.

Under section two, a framework is presented that should help the delighted reader to understand the research background in greater detail. In this part, the market environment that air cargo carriers are facing today is described with all its challenges and opportunities. Idiosyncratic characteristics of air cargo operations are explained. The section concludes with a historical reflection of the development of both SkyTeam Cargo and WOW.

Section three contains results of primary and secondary research with references to academic works and implementation practices. Firstly, a definition of the term alliance that suits the purpose of this study adequately is presented. After introducing to the concept of a strategic alliance in general, the book puts the focus on the application of this concept in the air cargo industry. From there, the purpose of an alliance for airlines, the possible advantages and the driving forces behind the decision to enter into an alliance are carved out. What is more, this section answers the core questions that every potential alliance prospect faces and states the prerequisites that must be met within an organization in preparation for alliance integration. The book sheds light on the challenges of alliance formation and alliance integration and potential critical success and stability factors. Concluding, the section provides a critical perspective on strategic alliances as well as a collection of other forms of strategic integration.

Sections four provides a comprehensive conclusion of the literature review and acts as a transition to the analytical part of the research. It aims at giving the reader a short heads up before the book goes into a detailed examination of both cargo alliances.

The fifth section contains the analytical part of this book. It analyses specific revenue-tonne-kilometres derived from the Airline Business Cargo Surveys statistics on a year-to-year basis from 1998 till 2010. It includes an analysis of the total market development as well as an evaluation of the developments of both alliances, WOW and SkyTeam Cargo, in general, as well as of their respective members.

The final section provides a short summary of all chapters and the answers to the proposed research questions that have been reached through research and the preparation of this study. Concluding, further research directions are pointed out.

2. Research Background

It is the purpose of this introduction to discuss relevant topics briefly in context of air cargo alliances and in a manner that relates to the subject of this book. It should help the delighted reader to get some sort of understanding about the current market conditions, without making any claims of being complete.

2.1. Market Environment

The business of air cargo operations has been a field of rapid changes and developments in the last few years. Embedded in a framework of global economics, trade development and subject to manifold regulations, air freight as a barometer of trade will continue to be a key driver in furthering globalization.[4] For a detailed description of the development and the history of air freight services see Chiavi (2005) and Allaz (2004).

2.1.1. Challenges

Air cargo carriers operating in a global market are faced with all different kinds of challenges, including rather recent developments like the liberalization of air transport markets, increasing competition through the growth of integrators, as well as inherent challenges like directional imbalance, marginal pricing of substantial volumes, the absence of new dedicated freighter aircraft, airport noise regulations and a dependence on belly cargo and therefore a schedule to please passengers. Adding to that, air cargo operations are highly dependent on the overall world economic situation and macroeconomic variables.[5] It is not exclusively world trade activity that affects air cargo operators. Other factors, such as the development of the oil price can have a large impact on the demand for and the supply of air freight services as well. As fuel costs make up a large part of the variable costs, especially on long haul freighter aircraft operations, a high oil price can lead to freight forwarders substituting the higher priced air transport services with road or maritime transport. Although the demand for air freight services has increased over the decades, freight yields have been declining sharply since 1989.[6] Growth over the last 60 years has been rapid; yet profitability has remained very low.[7]

2.1.1.1. Liberalization and Regulatory Environment

It can be argued that liberalization in the air transport market can both be seen as an opportunity as well as a challenge for established air cargo carriers. Increased competition has forced cargo carriers to act and change their old thinking patterns and behavior. No longer protected, they had to find other ways of keeping their strong market position and standing. This challenge has been one of the key drivers for the foundation of alliances in that sector. With deregulation, the air transport industry has moved away from strong economic regulations and to a large extend has been freed from the state’s control over prices, market entry and exit. With the new, in many cases still restricted, freedom of entry and exit, capacity, fares and operations, competition among international cargo airlines has increased fiercely as previously state-owned carriers and/or flag carriers no longer enjoyed protection.[8] With increased competition came significant traffic growth, a sharp reduction in prices and an increase in product quality for customers. On a positive note, liberalization allowed airlines to operate more efficiently within alliances and on their own.[9]

Liberalization attempts have been ongoing among many countries and trade blocks worldwide. It may well be argued that in an integrated economic block like the European Union, several packages have led to a high degree of freedom and harmonization.

Still, liberalization is an ongoing process and air transport freedom rights differ among all countries and are very much dependent on overall integration into a more open world economy. Global markets are far from contestable.[10] This is particularly important when looking at traffic rights, as there are still hundreds of bilateral air service agreements (ASAs) in place. It may well be that an airline that wants to expand into another market by acquiring a competitor will cause the traffic rights of the acquisition target to expire. This complex of problems has recently been in the news when Lufthansa took over Swiss and Austrian. In either case, Russia wanted to draw the traffic rights from both carriers as it no longer recognized Swiss as a Swiss airline and Austrian Airlines as being an Austrian company. In such cases, alliances can help to circumvent existing regulations. For a detailed analysis of the status of the liberalization efforts in the airline industry and the benefits of more open skies, see IATA (2006) study on liberalization.

2.1.1.2. Integrators and Competing Business Models

Although air cargo volumes increased rapidly (ten per cent annual growth between 1997 and 2004)[11], the traditional airfreight sector suffered from an economic decline. With a different culture and methodology, offering a one-stop solution, integrators have been able to acquire an increasing share of the traditional sector’s high value customers, absorbing all of the premium market growth. During the past 20 years, companies like Federal Express, UPS, DHL and TNT expanded their presence by moving into the higher value express, door-to-door services. They have introduced new levels of service standards via extensive use of information technology and comprehensive global network (Melbin, 1997; Hamilton, 1997 and Chu et al., 2004).[12]

2.1.2. Opportunities

However, air freight as a key instrument of globalization is still confronted with plenty of opportunities like an increase in international trade, rapid economic development of emerging markets and innovation. Liberalization and deregulation have enabled carriers to open new routes, enter new markets, attract new customers and build new relationships. Apart from air cargo carriers, Fu et al. (2010) summarize numerous reports and academic papers, which confirm that liberalization in air transport markets has had an important impact on worldwide economic growth and welfare gains.[13] Although innovation is more incremental, air cargo operators, together with all other service providers in the air cargo supply chain, constantly seek to drive down costs in all segments and improve product offerings. Leaving unpredictable fuel costs aside (which can also be hedged to account for unpredictability and to allow safer planning), it is safe to assume that this results in a light gradual decrease in production cost over time.

2.1.2.1. Innovation in Air Cargo Transport

The necessity of innovation in air cargo operations has been neglected for a long time, after few breakthrough innovations during the last 60 years. At the same time, cargo airlines are integrated in ultra dense global networks that provide fast service for customers but still rely on outdated IT systems and procedures. Protective market conditions in the past and leftover structures of those times frustrated innovation and have directed the evolution of the industry into a contrived and artificial structure.[14] As comes with long time-to-market and long usage periods of aircraft, there is also no breakthrough innovation when it comes to new airplane models. This is even more true for the cargo side of the business, as freighter aircraft are often happen to be converted ex-passenger aircraft and stay in service even longer. The newest models on the market are the Airbus A330F, the Boeing 777F Freighter and the Boeing 747-800F. All of them are derived from passenger airplane models and come with all sorts of compromise for dedicated air cargo carriers. Innovation in the field of airplanes can best be described as being incremental.

Nonetheless there has been a continuous stream of innovation in the fields of RFID, tracking and tracing, development of time sensitive express products as well as products that offer greater flexibility for customers. Innovations that yielded special products for temperature sensitive cargo could be one of the key drivers that have helped cargo carriers to gain access to totally new customer groups, e.g. the pharmaceutical industry.

Notable initiatives in the recent years that try to obtain foothold in the industry are Cargo 2000 and E-Freight. Cargo 2000 aims at implementing a new quality management system for the worldwide air cargo industry that should reduce operating costs and enhance customer service while improving the efficiency of air cargo in general. All this should happen in close partnerships with courier service providers.[15] E-freight is an industry-wide initiative involving carriers, freight forwarders, ground handlers, shippers and customs authorities that aims at taking paper work out of the air cargo supply chain and replace it with cheaper, more accurate and more reliable electronic messaging.[16]

A topic that is gaining momentum worldwide and that is becoming increasingly important is the security of the supply chain as a whole. As an important part of the supply chain, air cargo operators are faced with the need to adapt to various new regulations and policies that have been implemented since the 9/11 attacks.[17] This is particularly important as air transportation represents a large point of impact and finds favor with terrorist attacks. All of these changes require a capable IT infrastructure. IT systems are expensive to change but necessary to keep up with the pace of business integration and better customer service (booking, tracking etc) and - as with other investments – can help to lower the costs and improve service in the long term. Information technology and handling of information flow is definitely the key for many cargo change initiatives.[18] Integration and concerted implementation within an alliance network can help individual air cargo operators to gain even more value from such initiatives. Another current development that aims at improving safety and security along the air cargo supply chain as well as at enlarging economic savings refers to the deployment of new ULDs (unit loading devices).[19]

With decreasing market regulation, air carriers are forced to compete more fiercely. Being on the edge of innovation, quick reaction to customer needs and development of new products can help them to gain a lasting strategic advantage over their competitors.

2.1.2.2. Market Facts and Numbers

Commonly used quantitative measures of the international air freight business are Freight-Tonne-Kilometres (FTK)[20] and Revenue-Tonne-Kilometres (RTK)[21]. As stated earlier, the demand for air service operations depends heavily on the state of the world economy. A study in 2001 that used simple linear regression came to the conclusion that the growth of air freight equates 3.18 times GDP growth. From 1950 to 2000, the average growth rate for FTK was 9.76 per cent while the average GDP grew by 3.75 per cent. Four characteristics evolved in the analysis of the results:[22]

- The average growth rate of freight forwarding is significantly higher than the development of world trade and GDP
- Air freight is strongly related to the business cycle and trade development
- Air freight development shows a significantly higher volatility compared to real GDP
- The relative volatility seems to have decreased from 1970 to 2000

illustration not visible in this excerpt

Figure 2: Air Cargo Growth Rates (Source: Boeing)

The above chart from Boeing Airplanes describes the growth rates of air cargo in the last decade and highlights the volatility in the demand for air cargo services.[23]

illustration not visible in this excerpt

Figure 3: Freight Yield 1989 – 2009 (Source: Boeing)

According to Boeing, even though scheduled freight yield increased from 2002 to 2008 because of fuel surcharges, it had been declining since 1989, at an average rate of 4.9% per year, after adjusting for inflation.[24]

illustration not visible in this excerpt

Figure 4: World Air Cargo Traffic in RTK (Source: Boeing)

Latest data from Boeing shows that in 2009 the world maritime industry generated an estimated total of 60 trillion RTKs compared to 166.8 billion RTKs for the air cargo industry. However, this maritime traffic includes movement of bulk commodities such as oil, metal ores, and grains, most of which cannot be directly compared to high-value dry commodities associated with transport by air. A better comparison of the air and maritime modes can be made using the remaining maritime dry cargo after bulk commodities have been subtracted, which totaled about 16.9 trillion RTKs in 2009.[25]

The short term outlook is not comforting after all. Airport Council International ACI September 2011 statistics show a further decrease of 3.8% in airfreight handled. The CEO of ACI Europe, Oliver Jankovec points out that the difference between passenger and freight transport is increasing and stands now by 10,8%.[26] The downward trend for freight demand is real and freight as an early indicator for world economic development points to further declines in economic activity which in turn will decrease the demand for air cargo services even more in the near future.

Still, the long term outlook is bright. Although recent statistics point to a decrease in demand for freight volume, the long term upward trend is intact. This is supported by studies of both Boeing and Airbus as well as by studies from international organizations like IATA and ICAO.

illustration not visible in this excerpt

Figure 5: World Air Cargo Growth (Source: Boeing)

According to Boeing (2010) world air cargo traffic is expected to grow 5.9% per year over the next 20 years. Air freight RTK growth, including express traffic, will average 6.0% annually. Airmail traffic will grow much more slowly, averaging only 1.4% growth annually through 2029. It should be noted that because of the dramatic 2009 drop, the historic 10-year world air cargo growth rate fell from 3.9% during the 1997-to-2007 period to only 1.9% during the 1999-to-2009 period. Overall, world air cargo traffic will increase from 166.8 billion RTKs in 2009 (down from its 2007 record of 191.4 billion) to more than 526.5 billion RTKs in 2029.[27]

illustration not visible in this excerpt

Figure 6: Historical and Forecast Air Cargo Growth Rates (Source: Boeing)

Asia’s air cargo markets will continue to lead the world air cargo industry in average annual growth rates, with domestic China and intra-Asia markets expanding 9.2% and 7.9% per year, respectively. Markets linking Latin America with North America and Latin America with Europe, as well as markets between the Middle East and Europe, will grow at approximately world average growth rate. The more mature North America and Europe markets reflect lower-than-average traffic growth rates.[28]

This long term upward trend is also reflected by estimates of Airbus and Boeing regarding the need for new freighter aircraft in the coming years: According to Boeing, the freighter fleet is forecast to expand by more than two-thirds, from 1,755 airplanes in 2009 to 2,967 airplanes in 2029.[29]

Apart from short term considerations, the future outlook for cargo carriers can be considered bright as growth will continue over the next decades with the support of an increase in international trade, development in emerging markets and the growing need to transport time sensitive, higher-value goods.

For further information on market outlook, I would like to point the delighted reader to the Airbus Global Market Forecast 2011-2030, the Boeing World Air Cargo Forecast 2010-2011 and the Boeing Current Market Outlook 2011-2030.

2.2. Idiosyncratic Economics of Air Cargo Operations

Air cargo operators offer an undifferentiated, highly perishable product: Although companies try to differentiate their offerings from their competitors, provided services are still very similar. In addition to this, the air cargo services are highly perishable; an empty cargo hold cannot be stored for future sale and represents a dead loss for the service provider.[30] Modern air freight enables fast transport of goods within a global network and therefore stands out due to a high economic efficiency, when compared to other modes of transport. However, because of its nature, the cargo business is also much higher regulated when it comes down to safety standards and statutory requirements.[31]

As a key driver of international trade, air cargo is highly dependent on the global economic situation and constantly has to cope with fluctuations in demand. The supply with air cargo services, however, is very inelastic. This can come as a problem as companies configure their capacity in order to manage demand surges, which is usually part of a long term planning process. Reaction to unexpected demand shifts, such as a change in aircraft configuration or a change in fleet size can be costly and require great effort. Air cargo operators therefore employ a very complex fare structure to account for that. With regard to the cost structure of a cargo airline, large part is made up of fixed costs as marginal costs are low.[32] Adding to that, fuel costs as a major part of the variable costs depend on the oil price and are therefore not entirely predictable. In times of a strong dollar, this can prove to be an even greater concern for air transport operators outside the United States of America.

The competition in air cargo operations happens to be among carriers from all over the world, each carrier from a different home country. That implies that every air cargo operator has to deal with very different basic conditions in terms of available resources, economic and technical regulations.[33] Various practioneers claim that air carriers from specific countries enjoy a greater degree of freedom as well as substantially lower cost structures and thus imply that the competition in some markets takes place in an unfair and distorted environment.

Compared to other modes of transport, air freight volumes are very low as both passenger airlines as well as dedicated cargo carriers together carry only one per cent of the world trade volume with their aircraft fleets. However, research estimates the value of those – often time sensitive - goods to make up between ten and 30 per cent of the world trade value.[34]

2.3. Reactions of Air Cargo Carriers

In order to face the challenges and to leverage the opportunities, air cargo operators have adapted their short term as well as long term strategy in different ways. Short term reactions to a decline in economic activity included taking airplanes out of service and storing them in the desert. Long term considerations have led to different kinds of co-operations with competitors, most importantly the formation of alliances, which should have helped to create economies of scale, deal with the increased complexity of information flow and should have enabled each company to cover a bigger network.[35]

2.3.1. WOW

2.3.1.1. Taking Off with High Hopes

After discussions and preparations started in April 2000, WOW (known under the project name New Global Cargo) was officially incorporated in October 2001 by three founder companies, namely Lufthansa Cargo, Singapore Airlines Cargo and SAS Cargo. Being autonomous, wholly owned subsidiaries of their parent companies, they enjoyed a greater degree of freedom and flexibility in decision making and in their operations. At that time, all parent companies were also members of the Star Alliance.[36] Japan Airlines, now a member of the passenger alliance OneWorld, joined the alliance in mid-2002 for its cargo activities, without setting up a dedicated cargo subsidiary.[37] At that time, the members of the WOW alliance together operated scheduled freighter operations to 523 airports in 103 countries.[38] The name WOW is no abbreviation but should rather stand for a new, dynamic and innovative way of carrying freight. As a symbolic step Lufthansa Cargo started to add the WOW logo to their MD-11 freighters from 2003 onwards.[39]

The underlying premise of WOW was that customers are no longer seeking pure transportation services but innovative solutions to complex logistics requirements. Therefore the WOW alliance was looking for ways to harmonize business product lines, processing, handling and information technology systems as well as ways to unify freight networks, sales and marketing structures to meet customer demand for rapid, reliable and flexible global service.[40]

2.3.1.2. Difficulties Getting Off the Ground

Hopes to revolutionize the air cargo business in a way that Star Alliance has transformed air travel were flying high but the following years will eventually prove that the venture did not take off quite as planned and never managed to live up to the promising name.

Right after the formation, the aftermath of 9/11 had a substantial impact on the venture: due to a decrease in demand for air cargo operations, Lufthansa Cargo had to ground two of its 20 freighters temporarily, while Singapore Airlines Cargo deferred the delivery of its 12th new Boeing 747-400F freighter by six months. The rollout of the brand name WOW was delayed until March.[41]

As soon as the first milestones had been reached, other challenges arose: In 2002 Andreas Otto, a member of the Lufthansa cargo board, proclaimed that over 80 per cent of the total cargo business of the three founding members are harmonized as well as 100 per cent of each firms’ time-definite offerings. This was only half the truth as each carrier has retained the individual brandings for their time-definite products (td.Flash of LH Cargo, SAS Priority of SAS Cargo and S1A Swiftride of SIA Cargo). At that stage LH Cargo has embarked upon long-term "business partnerships" with the major forwarders and was already planning new ventures with Deutsche Post World Net and DHL to enhance and promote their own products. SIA Cargo, on the other hand, openly admitted that it did not have the resources to set up such programs.[42]

After the launch of seamless joint express services on the worldwide systems and a time-definite general cargo product, alliance planners now focused on the integration of sales, handling and IT systems as well filling missing geographical gaps in the global network to increase market share and global presence. Despite a combined fleet of 33 dedicated freighter aircraft (MD11 and 747F) and the underbelly capacity of 600 aircraft, the three founding airlines still held only about ten per cent of the global market share at that time, which showed the high degree of fragmentation in the air cargo industry.[43] Aside from the founding airlines, two associated carriers, namely Thomas Cook/ Condor and Spanair also provided additional bellyhold capacity for the WOW alliance.[44]

Although it was unclear how much business actually moved as part of the alliance, each member carrier had set aside ten per cent of the capacity on all their flights toward a seamless, worldwide air freight network by September 2003. By 2004, the alliance had reached its peak, operating a combined fleet of 43 freighters and more than 760 passenger aircraft with bellyhold capacity, serving "an unparalleled route network of destinations, linking the world's major trading centers."[45]

On the contrary, the limits of alliances seem to have been immanent from the very beginning. In 2003, SAS Cargo launched 747-400 freighter flights to New York under a pact with Korean Air Cargo, one of the founding members of the rivaling SkyTeam Cargo.[46] By 2005, Lufthansa Cargo has engaged in several global co-operations and deals like the foundation of Jade Cargo, a joint venture with the Chinese Shenzhen Airlines. What is more, the development of AeroLogic[47] was well under way at that time. It was in the same breath that the founding member of WOW proclaimed that it is no longer bound by any alliance or partnership and was openly speaking about a portfolio of partnerships. This change of wording reflected the shift of thinking inside the German cargo carrier: The WOW alliance no longer had the highest priority.[48]

In a vicious circle, decreasing commitment of all members to the alliance and their partners led to an increasing engagement in other strategies, which led to further contradictions of the alliance.

2.3.1.3. The Recent Years

In 2008, a source at Lufthansa told Die Welt that the alliance is eventually going to be dropped by all its members as “no one is sufficiently aware of the advantages offered by the alliance". Other reports claim that members of the WOW alliance have competed against each other and have failed to agree on joint offers, in light of the general increase in competition within the global commercial aviation industry.[49] Lufthansa Cargo mourned missing reservation systems and customer retention programs.[50]

Even before the announcement of its withdrawal from the alliance in 2009 Lufthansa Cargo has started to change the livery of their aircraft back to a pre-alliance state without any WOW markings.

After entering bankruptcy in January and financial restructuration, Japan Airlines decided to suspend all scheduled freighter flights after more than 50 years of operations by November 2010. With the storage and sale of six dedicated 747 and three 767 freighter aircraft, Japan Airlines simultaneously left the WOW alliance.[51]

To this day only Singapore Airlines Cargo and SAS Cargo belong to the WOW alliance, both operating as subsidiaries of the respective Star Alliance passenger airlines. SIA Cargo operates twelve dedicated 747-400 freighters and has a network that spans 72 cities in 37 countries with over 600 flights scheduled every week. In contrast, SAS Cargo – without dedicated freighter aircraft – uses free bellycargo compartments from aircraft of its parent company SAS.[52]

The alliance continues to exist but the effort and the dedication of both carriers is highly questionable, as there are barely any intersections in their operations, as well as no words from officials of either company or joint press releases. At present, the former website of the WOW alliance is no longer online and the domain wowingtheskies.com is currently (21.10.2011) not registered and up for sale.

2.3.2. SkyTeam Cargo

2.3.2.1. 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.[53] The joint venture used its own IT system, revenue management and customer database.[54] 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."[55] 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 its overall marketing and product philosophy.[56] Over the coming years this strategic concept led to fast growth in terms of members and broad geographical presence.

2.3.2.2. 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 its 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.[57] 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.[58] 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.[59]

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 with WOW alliance members, as a co-operation only in the manner of the respective passenger alliance is not entirely feasible for SkyTeam Cargo.[60]

2.3.2.3. Status Quo and Outlook

At present, SkyTeam Cargo consists of nine full member airlines being the biggest air cargo alliance of the world. Together the cargo core carriers operate more than 50 dedicated freighter aircraft and can use the bellyhold capacity of more than 2100 passenger aircraft.[61] With approximately 14.500 daily departures, the whole SkyTeam network spans 926 destinations in 174 countries.[62] Major cargo hubs include Amsterdam Schipol, Anchorage Ted Stevens, Atlanta Hartsfield-Jackson, Mexico City, Paris-Charles de Gaulle, Seoul Incheon, Shanghai Pudong and Guangzhou Baiyun.

China Airlines has entered into the SkyTeam alliance in September 2011 and it can be considered very likely that the flag carrier of Taiwan will enter into the cargo alliance as well.[63] As for other possible candidates, the cargo subsidiaries of the other SkyTeam members are named as potential future members.

2.4. Summary of WOW and SkyTeam Cargo

Both alliances have been started in the early days of the last decade in order to face the challenges and leverage the opportunities in the air cargo sector. As this strategic alliance concept has been adapted to the air cargo industry it should have marked a cornerstone that enabled long term success and survival through synergy effects and higher competitiveness individually and as a group.[64] Both alliances have been formed with a view of combining networks, aligning products and services and the goal to take a major share of global growth. Now, a decade later, WOW and SkyTeam Cargo have evolved, but in different directions and not all members or ex-members are content with the results. WOW is now smaller than on the date of its inception whereas SkyTeam cargo has grown ever since its foundation and has gone through a lot of merger activity.

3. Literature Review – State of the Field

3.1. A Definition and Distinction of the Alliance Term

The subject of strategic alliances has been studied widely in literature. Most often, authors introduce readers to their research by delimitating the whole concept and by stating their definition of the term alliance that fits the particular research direction. That is why - in literature - the term alliance is applied as a genus for a wide range of concepts and consistent use of the term cannot be found. In the following, I would like to include a few author perspectives on the term strategic alliance, which should enable the reader to get a good sense of an alliance construct.

Merriam-Webster Thesaurus describes an alliance as “a state of having shared interests or efforts (as in social or in business matters).[65] At Serrat (2009), for example, there is a multitude of alliance configurations along a continuum of cooperative arrangements that depend on the objectives and structure of the alliance. Similarly, Elmuti and Kathawala (2001) define a strategic alliance as different types of partnerships that involve two or more companies. Together those companies pursue clear strategic objectives in order to generate mutually beneficial value. The level of integration can differ from alliance to alliance.[66] For this piece of research, it is necessary to introduce a narrower alliance term, one that covers the very high integration that airline alliances are built upon.

Yoshino and Rangan (1995) state that these strategic interfirm relationships involve partners from varied parts of the world, each partner covering a range of functions and activities formed in response to major strategic challenges. It should help them to enhance the effectiveness of their competitive strategies.[67] To narrow down the varied interpretations they define three characteristics that must be met to define an alliance: The members, who pursue a set of agreed upon goals, remain independent. Each partner has to contribute on a continuing basis in one or more key strategic areas and benefits as well as control must be shared.[68]

As Morrish and Hamilton (2002) point out, airline alliances are collaborative arrangements between two or more carriers that involve joint operations with the goal of improving competitiveness and thereby enhancing overall performance. Following most authors reasoning, genuine strategic alliances must be distinguished from licensing, cross licensing or franchising, equity investments, cartels, distribution cartels as well as from mergers, takeovers and acquisition or joint ventures. It is the same genuine alliance term that fits the direction of this book best. Plain code-sharing or interlining agreements and block spacing are not considered as a strategic alliance in that sense. As comes with no surprise, Serrat (2009) points out that alliances are all based on voluntary agreements.[69] As the term strategic implies they are set up for the long term.

3.2. State of the Field

3.2.1. Strategic Alliances in General

The concept of strategic alliances has been studied widely in academic literature, books and journals, being looked at, out of different research directions from economics to finance to human resource management and to legal issues. The range of analysis is executed out of different perspectives, namely value based perspectives, resource based perspectives, knowledge based approaches or out of a social and cultural perspective. Strategic alliances are common in all different kinds of industries and most sectors have been in the focus of specialized academic research. As with other fields in logistics, there is a wide range of different research approaches where positivist researchers use a more quantitative approach, while researchers that are more interpretative in nature usually apply a more qualitative approach.

Hereunder an assortment of contemporary research about alliances is presented:

Authors have studied the driving forces behind the decision to form an alliance (Doz and Hamel, 1998; Hook and Kuglin, 2002; Clover and Wasserman, 2003), the process of alliance formation (Yoshino and Rangan, 1995; Hook and Kuglin, 2002), critical success factors (Hook and Kuglin, 2002; Kale and Singh, 2009) and reasons for failure (Ulijn, Duysters, Meijer, 2010). Bonder and Pritzi (1992) proposed a theoretical framework for successful alliance co-operation. Others have studied if and how alliances can create value for all partners (Chan et al 1997; Doz and Hamel 1998; Bing-Sheng, 2003; Bai and Yoo, 2007; Wratschko, 2008; Bösecke, 2009) and how value added for each partner can be measured (Adegbesan and Higgins, 2011).

A wider range of authors has devoted themselves to the topic of alliance management (Yoshina and Srinivasa, 1995; Elmuti and Kathawala, 2001; Kleymann and Seristö, 2004; Corsten, Kale, Schreiner, 2009; Martens et al, 2011). Agarwal, Croson, and Mahoney (2010) studied the role of incentives and communication in strategic alliances. The area of mutual learning process and knowledge transfer in strategic alliances has been commented on by Doz (1996), Iyer (2002), Muthusamy and White (2005) and Serrat (2009), who are all in agreement that learning processes are key for alliance success.

3.2.2. Strategic Alliances in Air Transportation

Strategic alliances in air transport have been a field of study since this concept took hold in that particular industry. However, most of the academic research focuses on the passenger side of the business, which comes not as a surprise as strategic alliances on the passenger side have developed earlier. What is more, they are a lot more common, bigger in size and importance and higher developed as their cargo counterparts.

Various alliance and partnership concepts have been covered in the years. In a journal article, Morrish & Hamilton (2002) present an overview of the major studies about alliances in the airline industry.[70] Starting in 1985, Oster and Pickerell focused on code-sharing agreements among major airlines. Some of the earlier studies were governmental and regulatory investigations commissioned in particular in the US and the UK (Gellman Research Associates, 1994; UK Civil Aviation Authority, 1994; US General Accounting Office, 1995). They looked at possible benefits and other alliance related effects that affect carriers and the market and have been used as a basis for decision making in policy-making, specifically relating to anti-trust and other competitive issues. Pustay (1992) and Dresdner and Windle (1996) wrote conceptual papers about alliances. Park (2007) studied the effects of airline alliances on markets and economic welfare. Chen and Chen (2003) studied the effect of strategic alliances and risk pooling on the load factors of international airline operations. Dresner et al (2005) covered the topic of trans-Atlantic airline alliances. Youssef and Hansen (1994) studied the effect on competition. Brueckner and Whalen (2000) studied the price effects of international airline alliances. Oum et al. (2000) studied airline alliances in the light of globalization and covered a wider range of areas. Other studies that dealt with passenger alliances include the work from Chan et al (1997), Glisson et al (2006), Flores Jr. (1998) and Wang and Evans (2002). Agarwal et al (2006) have studied carrier alliances and shipper collaborations in cargo transportation.

Other studies of alliances examine scale economies (White, 1979) and density and scope effects (Caves et al., 1984; McShan and Windle, 1990; Gillen et al., 1988; Antoniou, 1991; Park, 1997). Implications on cost economies were assessed by Keeler and Formby (1994). According to Morrell and Pilon (1999), most of these studies find constant returns to firm size, with mixed results regarding economies of traffic density and scope.[71]

Some general books, articles and studies about air transportation have devoted specific parts in their writing to the topic of alliances: A selection includes Greenberg (1990), Hamil (1993), Gomes-Casseres (1996), Button et al (1998), Flint (1999), Hanlon (1999), Sissen (1999) and Doganis (2005).

Kleymann and Seristö (2004) cover the management of strategic airline alliances in all its aspects. Velez (2007) has investigated if strategic alliances in the air cargo sector can lead to comparative advantage for member airlines.

3.3. The Concept of Strategic Alliances

The intended purpose of an alliance differs among each construct. According to a survey of the Trendsetter Barometer by PriceWaterhouseCoopers the most prominent purposes are joint marketing, promotion, selling and distribution. While young and fast-growing technology companies use strategic alliances to benefit from more-established channels of distribution, marketing, or the brand reputation of bigger, better-known players, more-traditional businesses like established air transport operators tend to enter alliances for reasons such as geographic expansion, cost reduction, manufacturing, and other supply-chain synergies.[72]

In a much broader sense Doz and Hamel (1998) see strategic alliances as a logical and timely response to intense and rapid changes in economic activity, technology, and globalization, all of which have cast many corporations into two competitive races: one for the world and the other for the future.[73] By entering into an alliance, companies hope to enhance their strategic resources as self-sufficiency is becoming increasingly difficult. Organizations join forces in an increasingly complex, uncertain, and discontinuous external business environment that calls for focus and flexibility in equal measure.[74] Alliances can help airlines to focus on their core competences and markets while gaining additional flexibility through the integration with other carriers.

According to Doz and Hamel (1998), there are three features that make the foundation of alliances essential; all of them can be applied to the air cargo industry. Firstly the opportunities of the information age call for the melding of skills and resources that no individual company possesses entirely. In air cargo transport this could be particular knowledge about local markets (skills) and the provision of infrastructure (resources). Second, the formation of alliances is not based on vertically integrated structures of single corporations but is being built on seamless networks that must be standardized. Customers in air cargo seek for strong network solutions and first movers should be able to gain lasting advantages. In an article Karp (2004) summarizes the opinion of many airline strategists and argues that their core business is really network management and that operating aircraft is really secondary to that effort. In that sense, alliances are an economical way of extending those networks.[75] Third, alliances should help individual companies to combine insight and understanding in order to reduce complexity and uncertainties of the information economies.[76] The formation of an alliance always calls for organizational learning process inside every member airline, as well as for inter-organizational learning and knowledge exchange. On the other hand, we have to point out that every airline brings its own information technology systems into an alliance, which could lead to additional complexity during the formation stage. Even later on, this could prove to be a problem for alliance stability and longevity.

In a nutshell, alliances should help partners to access opportunities through the creation of seamless networks and the melding of skills while at the same time help to bypass costly self learning experience. Quicker learning can lead to quicker action, with the overall goal to improve competitiveness and thereby enhancing overall performance.[77] In the simplest sense, alliance integration should decrease costs, generate additional value and help to reengineer financials, apart from strategic benefits for their members.[78]

3.4. Alliances in the Air Cargo Business

In the next parts, attention will focus on the application of the strategic alliance concept in the air cargo industry. According to Park (1997) the majority of alliances in the airline industry are route based. Those so-called complementary alliances offer non-overlapping routes while parallel alliances’ routes overlap.[79] For WOW and SkyTeam Cargo route and network considerations definitely played a big role in the alliance formation decision. Both alliances can be seen as complementary in that sense.

3.4.1. Driving Forces of the Alliance Decision

Over the recent years, there has been an increasing number of airlines and cargo carriers going out of business. With this shakeout, came a strong tendency towards consolidation in air transportation as many large airlines merged to become even bigger in their operations, while other carriers formed or entered into alliances. Carriers are trying to solidify their market position.[80] In a Flight International article, Hamil (1993) states a very important point, why airlines rather choose to work together in an alliance or acquire small shares in each other than merging operation entirely under one single entity. Alliance integration therefore allows for the benefits of joint operations (access to larger route network and better customer service) without encountering the danger of losing air service agreement rights induced by change of ownership.[81]

In a New York Times article, Marie-Joseph Malé, SkyTeam’s managing director, names the liberalization of international aviation treaties, the globalization of the economy and advances in technology as the three main factors contributing to the growing strength of airline alliances.[82]

The distinct need for airline alliances comes about manifold reasons, which are relevant (in different degrees) for mostly every air cargo company operating in today’s market environment. Of course, all of these drivers are interrelated and affect each other; they basically work – from a financial viewpoint to a strategic one - towards the main driving force behind any strategic decision. That is the choice to realize the highest possible NPV of an investment.

Bleeke and Ernst (1993) state that organizations are entering into alliances to overcome the inherent risks associated with new product development, innovation processes, as alliances can help increase the speed of innovation, to overcome budgetary constraints, and to gain access to resources otherwise not available to them.[83] Additionally, large investments in IT systems, safety and security measures, cargo aircraft technology as well as airport and handling facilities improvements can be taken on with much more strength in an alliance construct.[84]

In the following, a more systematic approach to all those driving forces will be presented which includes:

- Exposure to growth
- Increase of market share
- Access to synergies and complementary assets

3.4.1.1. Get Exposure to Growth

Europe as a highly developed, fully integrated and very competitive airline market will yield 300 million US dollar net profits for its airlines next year while the worldwide net profit of the industry will comprise 4.9 billion US dollars according to the IATA. Growth potential of the old continents has been exhausted, while emerging markets are still in a process of rapid growth.[85] Expansion abroad often is impractical or impossible, so well established carriers from saturated and matured markets are constantly looking for ways to gain exposure to growth.[86] Even with growth continuing, the air cargo operators suffer from intrinsically low-profit margins. As a result, carriers are continually looking out for a variety of strategies to improve performance, basically to cut costs and improve revenues. With global expansion constrained by restrictive air services agreements, strategic alliances can be one effective construct for long term growth by circumventing existing regulations.[87] Additionally, acquisitions can lead a company to acquire more for a higher price, than what is actually needed. In this process, some of the resource and assets may not even survive the transaction.[88]

[...]


[1] See Serna Velez (2007), p. 7

[2] Drucker (1996)

[3] For a definition of RTK, see page 9

[4] See Chiavi (2005), p.489

[5] See O’Connor (2001), p.200 and Grönlund and Skoog (2005), p.474

[6] See Boeing (2010), p.2

[7] See Doganis (2005), p.4

[8] See Liasidou, (2004), sl. 3-4

[9] See Fu et al. (2010), p.374

[10] See Kleymann and Seristö (2004), p.4

[11] See Piermartini and Rousová (2008), p.1

[12] See Hui et al. (2007), Chu et al. (2004), Hamilton (1997), Melbin (1997)

[13] See Fu et al. (2010), pp.2-3

[14] See IATA (2006), p.3

[15] See Hui et al. (2007), and IATA (2011), www.iata.org (1.11.2011)

[16] See IATA (2011), www.iata.org (1.11.2011)

[17] See Pienaar and Vogt (2009), pp.394-396

[18] See Conway (2009), pp.7-8

[19] See Warehousenews.co.uk (2011), http://www.warehousenews.co.uk/ (2.11.2011)

[20] FTK: the sum of the products obtained by multiplying the number of tonnes of freight and express carried on each flight stage by the stage distance. For ICAO statistical purposes freight includes express and diplomatic bags but not passenger baggage

[21] RTK: One ton of cargo (mail and freight) that is transported for one kilometer

[22] See Chiavi (2005), p.504-506 and MDS Transmodal et al. (2001), p.16

[23] Boeing (2010), p.2

[24] Boeing (2010), p.3

[25] Boeing (2010), p.6

[26] See Payer (2011), www.austrianaviation.net (8.11.2011)

[27] Boeing (2010), p.8

[28] Boeing (2010), p.8

[29] See Boeing (2010), p.9

[30] O’Connor (2001), p.6

[31] Pompl (2007), p. 45

[32] Pompl (2007), p.46

[33] Pompl (2007), p.50

[34] See Pienaar and Vogt (2009), p.389 and Piermartini and Rousová (2008), p.1

[35] See Grönlund and Skoog (2005), p.484

[36] Star Alliance: The first and largest passenger airline alliance, founded in 1997

[37] one world: The 3rd largest passenger airline alliance, founded in 1999

[38] See Japan Times (2002): www.japantimes.co.jp (21.10.2011)

[39] See Allaz (2005), p.351

[40] See Taverna (2001), p.58

[41] See Taverna (2002), p.52

[42] See Turney (2002), pp.14-16

[43] See Taverna, (2002), p.52

[44] See Taverna, (2002), p.52

[45] See Karp, (2004), p.20-25

[46] See Air Cargo World (2003), p.4

[47] AeroLogic: A joint venture between DHL Aviation and Lufthansa Cargo

[48] See Turney (2005), pp.14-15

[49] See Transportweekly (2008), www.transportweekly.com (21.10.2011)

[50] See Airliners.de (2011), www.airliners.de (21.10.11)

[51] See Shippingonline (2010), www.shippingonline.cn (21.10.2011)

[52] See www.siacargo.com and www.sascargo.com (21.10.2011)

[53] www.skyteamcargo.com, (22.10.2011)

[54] See Conway (2002), p.9

[55] See Air Cargo World (2002), p.6

[56] See Taverna, (2002), p.52

[57] See Karp, (2004), pp.20-25

[58] See Air Cargo World (2004), pp.6-8

[59] www.skyteamcargo.com (22.10.2011)

[60] See Unknown (2004), pp.6-8

[61] See www.skyteam.com, www.airfleets.net, www.martinaircargo.com, www.af-kml.com (29.11.2011)

[62] www.skyteam.com (23.10.2011)

[63] See Unknown (2011), www.airlinesanddestinations.com (22.10.2011)

[64] See Serna Velez (2007), p. 7

[65] See Merriam-Webster Thesaurus definition

[66] See Elmuti and Kathawala (2001), pp.205-207

[67] See Rangan and Yoshino (1995), p.ix

[68] See Rangan and Yoshino (1995), pp.4-5

[69] See Serrat (2009). p.2

[70] See Hamilton and Morrish (2002)

[71] Morrell and Pilon (1999)

[72] See 1000ventures.com, www.1000ventures.com (14.11.2011)

[73] See Doz and Hamel (1998), p.xiii and p.39

[74] See Serrat,(2009), p.1

[75] See Karp (2004), pp.20-25

[76] Doz and Hamel (1998), p.2

[77] Hamilton and Morrish (2004)

[78] Bamford and Ernst (2003), pp.9-3 to 9-4

[79] Hamilton and Morrish (2004)

[80] Grönlund and Skoog (2005), p.481

[81] Hamil (1993), p.39

[82] See Stellin (2011), p.6

[83] Bleeke and Ernst (2003) and Muthusamy and White (2005), p.415

[84] Grönlund and Skoog (2005), p.481

[85] aero.de (2011): www.aero.de (1.11.2011)

[86] See Stellin (2011), p.6

[87] Hamilton and Morrish (2002), Grönlund and Skook (2005), p.481, Hanlon (1999), Sissen (1999)

[88] See Doz and Hamel (1998), p.3

Details

Pages
84
Type of Edition
Originalausgabe
Year
2013
ISBN (PDF)
9783954895540
ISBN (Softcover)
9783954890545
File size
1.6 MB
Language
English
Publication date
2013 (June)
Keywords
Strategic Alliance WOW SkyTeam Cargo Air Cargo Logistics Management

Author

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 Transport and Logistics Management, and Entrepreneurship and Innovation. During these studies, he spent one semester at the Business School of the Hong Kong University of Science and Technology. Besides, he had already the chance to collect work-experience in fields such as civil aviation, finance and journalism. His personal interests include aviation, travelling, economics and politics, entrepreneurship, financial markets, photography and music. Florian Smeritschnig currently lives and works in Vienna.
Previous

Title: WOW and SkyTeam Cargo: An In-depth Analysis of Strategic Alliances for Air Cargo Carriers and The Impact on Cargo Airlines’ Operations and Success