According to text, a strategic alliance is a partnership between firms whereby their resources and capabilities are combined to create a competitive advantage.” So why is an alliance in the best interests for an airline company such as United, American, or British Airways? In this exercise, your instructor will assign one of the three main alliances (One World. Star or Sky Team), and your teams will be asked to investigate the alliance and be prepared to discuss the following issues:

1. In general, why do airlines form an alliance with one another (particularly internationally) rather than expanding by acquisition?

2. What is the history of the alliance to which you were assigned?

3. Describe the main benefits that airlines hope to gain through membership. What is the competitive advantage of your particular alliance, if you find there is one?

4. Categorize the alliance in terms of the three types of strategic alliances. Also describe the cooperative strategy of a member firm in relation to its business-level and corporate-level strategy.

5. Think through issues of the future of airline alliances If you were the CEO of a major U.S. airline, what might worry you about your particular alliance, if anything?