The Air Travel Industry: Strategic Alliances

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Strategic alliances are business relationships and arrangements between two or more independent organizations to carry out a specific and mutually beneficial projector to achieve core business objectives. In todays competitive market, the success and survival of any business are determined by effective strategies that create an advantage over the competition. Through partnerships and alliances, individual companies are able to achieve colossal results that they would have independently. The airline industry is undoubtedly one of the most sophisticated and competitive industries in the world. Although the industry is characterized by a high level of entry hindrances, it is highly competitive and costly at the same time. Following the impacts of Covid-19 on the air travel industry, alliances including route sharing and cooperation to offer connections to various destinations could play an important role in boosting the performance of Southwest Airline in the current times.

In the air travel industry, strategic alliances could offer an array of benefits to both the passengers and the airline. According to Buckles (2019), strategic alliances provide an opportunity for service providers to offer extra services to their customers that would have been inconvenient or unavailable. Strategic alliances ensure high performance as it ensures the business focuses on its core competencies. With the need to reduce costs while at the same time ensuring customer satisfaction and experience, Southwest Airlines could enter into alliances that guarantee connections across various destination networks. This is a win-win solution for both the customers and the airline. Clients benefit from such alliances as they are able to reach their ultimate travel destinations more conveniently. On the other hand, combining travel networks will make it possible for the Airline to market more destinations which in turn attract more clients without necessarily operating the flights on their own (Hayward, 2020). More customers mean more generation of revenue for the airline while minimalizing operational costs.

Although Southwest airline could greatly benefit from a strategic alliance that includes combining travel networks, various risks could arise from such partnerships. The first challenge is in selecting the right partner. An alliance with a wrong partner could lead to failure of the perceived goals and objectives and could be damaging to the reputation of the business (Wakeam, 2021) Apart from that, maintaining the relationship created through the period is a great challenge in most alliances. Furthermore, mismanagement of some strategic alliances could lead to substantial negative impacts to the business hence hindering the firms capacity to attain its core business objectives.

Therefore, when a strategic alliance is critical to the success of organizational core business objectives it is important to ensure sound strategic alignment and management. According to Buckles (2019) alliances that are mutually beneficial are more likely to succeed and are easier to manage maintained. The key to maintaining alliances is through upholding trust and honesty throughout the period of the partnership. This shows the importance of alignment between the two partners before entering into an alliance. In general, the success of alliances is determined by the level of governance that encompasses effective communication, regular reviewing, and the presence of executive sponsorship.

References

Buckles, J. (2021). Understanding the Benefits and Challenges of Strategic Alliances. Web.

Hayward, J. (2021). Airline Alliances: What Are They & What Are The Benefits? Simple Flying.

Wekeam, J. (2021). The five factors of a strategic alliance. Ivy.

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