ASEAN AIRLINES : COMPETITION AND COOPERATION

Abstract

Air travel plays a crucial role in modern living. The arrival of the jet age has great implications on movement as distance and geographical barriers are broken down, encouraging greater interaction in political, economic and social activities. This study examines two related aspects of air transportation - competition and cooperation. They are seen as divergent yet complementary processes. While each airline compete for a larger share of the market, it also establishes cooperative agreements with other airlines to increase revenue for the parties involved against other carriers. Thus, cooperation works within the competitive environment of the airline industry. The high level of strict regulation and protectionism in the industry has restrictive impact on the development of air transport. While regulation impedes growth in air transport, positive competition contributes to an improvement in services, bringing about in greater passenger satisfaction. With increasing affluence, excellent services have became prime considerations in influencing passengers' choice of airlines. The improvement in standard of service gives space a qualitative dimension as air operators have to improve their services constantly to attract passengers. Cooperation offers airlines a means of improving their services. The expansion of route network and capacity and pool-joint operations and interline arrangements results in increased frequency and accessibility. Similarly, computerization of facilities provides greater convenience and accessibility of airline services to passengers. Thus, airlines can obtain higher yields by offering a more competitive standard of service. Current trends are seen as exerting strong impact on the future development of air transport; the support for privatization and liberalization in reducing the restrictiveness in the industry. The introduction of technological innovations changes pattern of movement and improves the service performance of airlines. The study confirms the action of competition and cooperation in the airline industry in enhancing the standard of air services as well as promoting development in air transport.