The impacts of airline alliances and open skies policies on international Air Freight Logistics (461)

Theme Track: Transportation - Logistics

Author:
Reynolds-Feighan, Aisling

This paper examines the impacts of strategic airline alliances and 'Open Skies' policies on the structure and organisation of the international air freight industry. The main focus of the paper is on the networks operated by air freight carriers. The analysis focuses on the US market, but analyses all carriers operating between the US and other markets. Changes in industry concentration and the spatial concentration of freight traffic are traced over the last 10 years, and the impact of airline alliances and open skies policies are quantified using the Lerman & Yitzhaki Gini decomposition method (1985). The analysis demonstrates that while combination passenger/freight carriers had an initial advantage in international markets, 'open skies' policies have given the dedicated 'all-cargo carriers' new growth opportunities that they have taken up rapidly. Individual carriers' network structures are also examined for this period, with the integrated carriers being compared and contrasted with the combination carriers. The implications of industry restructuring and changing market shares (in favour of the integrated carriers) for firms' supply-chain management strategies are examined in light of the analysis.

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