An Empirical Study for Investigation of the Effects of Strategic Alliances in the Civil Aviation Sector: THY (Turkish Airlines) Case

Abstract

Nowadays companies have to be reorganized in order to adopt changing environmental conditions and try to take advantage of opportunities arises while avoiding the emerging threats. One of the aforementioned reorganization effort is the strategic alliences between firms. The low rate of full capacity, high costs and high tax rates pushed airline companies for forging partnerships and as a result of this huge strategic alliances occured as like Star Alliance, One World and SkyTeam. These partnerships has built code sharing, frequent flier programme and similar collaborations helped the existing capacity usage to the maximum level. So that this provided crutial cost advantages to the companies. In this paper it is aimed to find out whether Turkish Airlines participation to the Star Alliance with signing engagement letter in 2006 has made structural change in firms profitability and within this frame the current ratio and asset turnover rate of Turkish Airlines between 1992-2013 is modelled on return on equity. Performed strategic alliance being examined by Chow test methodology and it is found that this alliance has resulted a structural change on firm’s return on equity.

DOI: 10.5901/mjss.2014.v5n22p102