Title: Hybrid-within-hybrid: governance issues within international airline alliances

Authors: Claude Ménard; Gézia Damergy

Addresses: Centre d'Economie de la Sorbonne (CES), Université de Paris (Panthéon-Sorbonne), Paris, France ' Centre d'Economie de la Sorbonne (CES), Université de Paris (Panthéon-Sorbonne), Paris, France

Abstract: Strategic alliances dominate the airline industry, with three ventures carrying the vast majority of passengers worldwide. The amplitude of this phenomenon has generated an abundant literature, mostly focused on why the industry endorsed this hybrid solution and to a lesser degree, how it is governed. However, little attention has been paid to a more recent form in which a subset of firms implemented a specific alliance within the broader alliance, creating a hybrid within the hybrid. This article explores the institutional conditions of emergence of such arrangements and the modalities of governance securing their resilience. It does so through a careful examination of the pioneering agreement between Air France-KLM and Delta Air Lines (recently extended to Virgin). The analysis shows how this hybrid-within-hybrid relies on the adaptation of the rules of the game by intermediate (meso-)institutions and a relational contract providing partners a flexible managerial governance.

Keywords: organisations; institutions; airline industry; strategic alliances; hybrids; governance; contracts; committees; transaction costs; metal neutral.

DOI: 10.1504/EJIM.2024.141648

European Journal of International Management, 2024 Vol.24 No.3/4, pp.383 - 407

Received: 14 Apr 2022
Accepted: 04 Oct 2022
Published online: 30 Sep 2024 *

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