Partnerships and joint Ventures
CHALLENGES IN PARTNERSHIPS & JOINT VENTURES
As the business environment of the airline industry becomes more and more competitive, an increasing number of airlines have chosen to form partnerships and joint ventures with other carriers. These relationships offer the benefit of increasing each airline’s scope and network spread which produces tangible marketing, sales and customer benefits. Moreover alliances extend an airline’s total market for relatively minimal additional costs.
Partnerships can be set up in a number of different ways. These can be on the basis of interlining and special prorate agreements to the identification of potential markets for code-share operations.
When analysing the benefits of a potential partnership, the following key issues should be considered:
- Basis for revenue sharing – Interline-Agreements, Multilateral and Special Prorate Agreements
- Suitability of markets/routes for a joint venture
- Compatibility of systems to support reservations and possible ET activities
- Pricing and Yield Management within potential joint venture routes
- Establishing the fixed costs of joint venture routes
- On going monitoring of joint venture results, including cannibalisation of current routes
- Establishing the customer experience, including the potential for through check-in and baggage
PROLOGIS can offer a wealth of expertise in Airline Partnership management and the setting-up joint ventures, in key areas such as airline business and network planning, schedule optimization, pricing and revenue management, data analysis, contracts as well as revenue accounting, monitoring of results and controlling of developments
Network Optimization: Analyse and identify the required adjustments to the network of an airline which ensures optimal benefits of the partnership are realised for both parties
Pricing & Revenue Management: Analysis of required changes and new options within Pricing. Optimising the Revenue Management of partnership routes including the changes in demand patterns
Agreements & Contracts: Creation and support of required agreement, including Bilateral Interline, Special Prorate, Sales, Joint Venture, within the given legal framework
Revenue Accounting: Support in calculation and billing of revenues in accordance with either bilateral or IATA based processes, and the allocation of all relevant costs within a joint venture
IT structure: Support the process of ensuring an airline’s IT structure is compatible with functionality required for airline partnerships, and offer assistance where system upgrades or replacements are required
Project management support: In addition to consulting, our project management services are also offered, to ensure a successful implementation.
Our consultants offer a range of experience gained from major network carriers, hybrid carriers, and LCC’s. We have supported many projects including start-ups, and specialize in the analysis and implementation of the business processes required to achieve your corporate objectives.
Based on best practice and proven analysis methodologies we can work with you to validate the key drivers for your partnership aspirations, and follow this with the successful implementation of your strategy.
Finally, we can work with you to analyze the effectiveness of your partnerships, reviewing revenue and costs levels against forecasts and budgets, and identifying areas where adjustments may be required.
|CASE STUDY: OUTSOURCED INTERLINE BILLING IMPLEMENTATION|
PROLOGIS recently provided project management and business consultancy support to a major European regional carrier in respect of their implementation of an outsourced interline billing solution, based on Navitaire’s AsSISt Interline Billing system. The service was being implemented to support the introduction of a critical new Interline partnership. Read more
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Contact: Gerd Pontius