Why are alliances in the airline industry unstable?
A) Unstable industries make for unstable alliances
B) The alliances require cooperation among firms that must also compete with one another
C) The potential for firms to take opportunistic actions is too widespread
D) The industry is declining and profits are not sufficient to divide among alliance partners

Question

Quizplus · Accepted Answer

Alliances in the airline industry require cooperation among firms that must also compete with one another. This creates inherent instability as each member of the alliance may act in their own self-interest, leading to a breakdown in cooperation and the dissolution of the alliance. The potential for firms to engage in opportunistic actions further exacerbates this instability.

Why Are Alliances in the Airline Industry Unstable