The effects of strategic alliances and risk pooling on the load factors of international airline operations

This paper develops a theoretical model and conducts an empirical analysis of the effects of complementary and parallel codesharing on the load factors of international airline operations. The analysis shows that, given the increased demand resulting from the expansion of a global network, only parallel code-sharing leads to higher load factors, since parallel alliance airlines can supply fewer seats than their complementary counterparts. These results provide new insights into several managerial and policy issues about airline strategic alliances such as partner selection, cost savings, and supply coordination.