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Alliances: is it an asset for Air France?

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  1. Introduction
  2. SWOT analysis
  3. BCG Matrix
  4. Spotlight: Real Estate
  5. Cow milk: Colas
  6. Dilemma: Bouygues Telecom and Construction
  7. Dead weight: TF1
  8. Three scenarios for Bouygues
  9. Conclusion

In France, the airline industry is changing and where there were once large companies, there remains only one: Air France. While the entire airline industry is in crisis and the figures are not fully satisfactory, it is certainly one of the companies that remain the best. These figures validate the strategy that led Air France for several years.

This strategy is based on the strong assets of the company as it has balanced its hub especially the inter connection of a strong network of trade agreements and strategic policy. Thus, one of the most significant phenomena of the competitive environment of companies in the last ten to fifteen years has also affected the airline industry.

The complexity of development projects, globalization and the impact of time on the achievement of competitive strategies encourage firms to seek alternative modes of development. A number of recent changes have accelerated the restructuring in many sectors, creating new opportunities for firms that explain the rapid emergence of strategic alliances.

Even in the airline business cooperation is not a new phenomenon but has been a real interest since the early 1980s. What is new though is the frequency of the phenomenon of alliances, the multiplicity of its forms and its increasing complexity, the broadening of its objectives since the function of strategic alliances spread on the entire value chain.

Thus, the growing interest in the literature seems to be correlated with the significant development of agreements between undertakings, showing the alliances not as simple as a strategic mode, but as a fundamental characteristic of business development.

In airlines, alliances are now the backbone of the restructuring of the sector. The phenomenon of emergence and rise of alliances has created new organizations. These alliances between the airline companies are emerging as a strategic option for airlines and have transformed the business.

Air France unlike its competitors resisted the September 11 crisis; however, all the other airline companies were not so lucky. The social climate in the French air has seldom been as bad. Meanwhile, the state currently controls 54.4% of Air France plans to sell 30-40% stake in the company.

The opening of capital aims to 'give the company new spaces of freedom to enable it to expand to the entire planet'. Following the announcement by the government to privatize Air France, many questions are raised. One of the stated purposes this reduction in state capital to enable the company to consolidate its alliances particularly in the context of Sky Team.

Thus, although the current results show that the company works very well with the current situation, it is undeniable that the French will discover new upheaval. Recent developments in the environment of airlines have led to new modes of creation and distribution of value arising from changes in the policy and regulatory framework. Exacerbated in a competitive environment, Air France has favored the strategy of growth both internally and externally, to create a value added product with differentiation.

Currently, Air France is a majority-owned company, but driven by social unrest and discontent from the employees could make it become a public company in which the employees have the right to strike . The purpose of privatization is to create new partnerships and governments must find solutions to the social climate so that it does not deteriorate.

Tags :Air France, alliances and mergers, asset for the airline company,

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