Conclusions and Future Research

Abstract

This study deals with the revenue sharing problem arising in strategic alliances in the passenger airline industry. In a passenger airline alliance, partner airlines are allowed to sell tickets for flights including flight legs operated by different airlines. Therefore, efficient mechanisms have to be designed, which define how the revenue generated from selling a ticket should be divided among the airlines in a fair way. Despite its various advantages, airlines may leave the alliance if they realize that it is not better than operating alone or with other partners. Thus, a fair allocation of the revenue is critical for the long-term stability of the alliance.