LEVELS OF AIRLINE ALLIANCE MEMBERSHIP BALANCING RISKS AND BENEFITS

This article relates the risks and benefits of alliancing to different levels of alliance integration. The trade-off between alliance benefits reaped and risk levels inherent in the tightness of integration into the alliance as well as mechanisms to dampen the potentially detrimental effects of high levels of risk are discussed. It is suggested that risk in itself does not necessarily carry negative consequences; based on findings from organisation theory research, the role of inherently risky alliance-specific investments as both a generator of efficiency and as a facilitator of trust within the alliance is described.

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