Abstract:
Since the late 1990s, global network airlines have enrolled in one of the three existing
global alliances (GAL) namely the Sky-Team, Star Alliance and Oneworld. By 2011, the
airlines in the alliance dominated over two-thirds of all international traffic. This research
seeks to examine the legal and economic analysis, and consequent interpretation of airline
alliances within civil aviation and how this affects fair competition. The evolution of global
airline alliances is characterised by the analysis of their size, as well as the volume of the
partnership and code-share agreement between the alliances. The findings of this study
indicate that the aviation international regulatory framework recognises that these
principles have thus far been enacted and applied throughout the legal and/or regulatory
instruments. However, with the ever-expanding commercial aviation industry, the desire
for business growth and regulatory framework are not always aligned. Airline alliances
have proved to be cost-effective and efficient and enabled passengers to reach their
designation on schedule.
Furthermore, they have also enhanced fair competition in the airline industry with the result
that the market now operates more effectively. This research recommends that airline
alliances should be allowed, but that competition regulatory authorities must be
empowered to scrutinise them and closely monitor the conditions imposed on the alliance
to ensure the protection of the smaller players in the industry and any anti-competitive
effects mitigated adequately. The regulatory competition bodies should lay out policies and
procedures encouraging fair competition in the industry by seeking to eliminate unfair and
procedurally flawed barriers and consideration given to the fundamental benefits to be
enjoyed by the businesses and stakeholders alike in the formation and existence of these
alliances.
