Airlines form alliances to expand their reach and offer improved collective services, thereby attracting a greater passenger base. As shown in Figure 1, the Alliance Factors tab allows you to specify alliance details and associated traffic impact factors. Data entry can be done manually or via CSV import.
Alliance Definition
Fields in the Alliance table include:
- Alliance: Name of the airline alliance.
- Airlines: Comma-separated IATA codes of member airlines.
- Local_Factor_To_Online: This factor compares the local service traffic of alliance members to a direct online service, with values such as 0.2 indicating 20% effectiveness of an interline service compared to an online service.
- Connect_Factor_to_Online: This denotes the factor for connecting traffic relative to an online service.
- Notes: An extra field for you to populate user notes.
To analyze the effects of an airline transitioning between alliances, remove its IATA code from one alliance and add it to the new one within the table.
Alliance City Presence
Airlines within an alliance that has a strong city presence often generate higher revenue than their proportional market share calculated from a standard QSI model. This phenomenon can be attributed to several factors:
- Enhanced Value Proposition: As the network of an airline alliance expands within a city, the collective offering of its member airlines becomes more compelling. This results in:
- Increased loyalty among frequent flyers, who are more inclined to commit to the alliance’s member airlines.
- Greater financial incentives and benefits for travel agencies through larger overrides.
- Improved service capabilities for corporate travel departments, thanks to the comprehensive reach of the alliance’s network.
- Improved Financial Metrics: A pronounced presence in a city is typically reflected in higher yield performance.
Maximizing revenue gains requires strategic market positioning — attaining a top-tier status as either the first or second preferred alliance in a city is essential. Marginal advancements in rank, such as improving from sixth to fifth, typically fail to produce significant financial returns.
Fligence Alliance enables the configuration of Alliance City Presence Factor, as shown in Figure 1, which adjusts for the relative market position of alliances and independent airlines. Acceptable values range from 0.9 to 1.1, where 0.9 applies a 10% revenue discount and 1.1 applies a 10% revenue premium. Rankings are determined among alliances and independent airlines. For instance, in a market with three alliances and five independent airlines, they are ranked from 1 to 8. The top five — whether alliances or independent carriers — can be assigned a premium or discount, and a specific factor is allocated to those ranked beyond the top five.
Selected Airlines for Reports
The output reports contain data from hundreds of airlines. To tailor the reports to your specific interests, you can designate a subset of airlines for display. Simply enter the IATA codes of your target airlines in the Selected Airport for Reports field in Figure 1, separating each code with a comma. Once you have updated your selection, click the Save button. Now you can view the revised report from the Planning > Selected Summary menu. If no specific airlines are selected, the report will default to showing data aggregated by airline alliances.