The Determinants of Airline Alliances

In this paper we conduct an empirical investigation of the determinants of airline alliances. The results of the analysis show that well established airlines with large passengers' volume are more likely to participate in an alliance, and are essential for the sustainability of the alliance. In line with these findings, older airlines have a higher probability of being part of an alliance. Moreover, the decision to join or form an alliance is fostered by the aggregate market share of the alliances. Interestingly, our analysis suggests that the airline's main decision is not to choose a specific alliance, but whether to join or form an alliance.