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Hubbard Case

Essay by   •  October 18, 2011  •  Essay  •  474 Words (2 Pages)  •  1,203 Views

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In the past 25 years, globalisation has been extremely significant around the world and it is essential to improve economic development with many countries joining together to share technology and their cultures. There are many factors which have facilitated the expansion of globalisation for all industries. The main factor for the airline industry is to use a strategic alliance (Wang 2004) between airlines in different countries where passengers can travel around the world for the same quality and the same price. In the future, globalisation in the airline industry will help empower countries and encourage the development of technology and increase a good quality of airline services.

This essay will examine the effect of globalisation on the airline industries. Firstly, it will identify challenges with the alliance strategies for the airline industry and then suggest why the alliance can be very useful for global airlines. It is argued that globalisation can have a negative impact on the global airline industry by using alliance strategies. However, they still can benefit the industry.

Global Airlines have become widespread in the past 25 years. They have increased rapidly for economic development and changed the airline industry significantly. The short distance of air transport can encourage to foreign investment, and it even spreads technology, Furthermore, the global airlines have been expanding their business organisation and the speed of communication between countries by coordinating the same agreement which facilitated transport for passengers in the long term.

There are many factors of globalisation impacting on the airline industry. Air travel has significant increased industry and it has effected the international investment and tourism. Over the past 20 years the main international airports have international passenger number increasingly. For example, in London Heathrow Airport has around 62,099,530 international passengers (Button 2008). Furthermore, the Open Skies Agreement is the main impact of globalisation on the airlines industry. Open skies agreements have significantly expanded international passenger and cargo flights which can improve the travel and trade industry by increasing productivity and make a good opportunity for many countries to grow (US Department State 2010). Moreover, Open Skies provides facilities and flexibility for the airline alliances (US Department State 2010) and airlines combine to improve the quality of products for the large market in the airline business (Button 2008). In addition, they respond for passenger's needs and products between countries which increases global income in air transport by increasing international tourists and logistic shipments (Button 2008) and it also obtain a lot of advantages in term of the value of goods and services. Increasing economic activity improves the value chain of domestic transport by making it bigger in the international

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