Bottom-line buddies.(Air alliances)(Brief Article)

The friendly skies have become even friendlier, at least when it comes to airlines' business relationships. As carriers struggle to cut costs, they are turning to alliances for help. From shared ticket counters, computer services, and baggage handlers to collective food procurement deals, airline partnerships--once touted because they offered service advantages for passengers--have become an accounting tool.

"We saved US$1.2 million [in 2003] just through joint bidding on ground handling contracts and other shared contracts with our partners," says Jorge Fernandez, Delta Air Lines Latin America and Caribbean director.

For stone carriers, alliances back financing deals. After Swiss International Air Lines reported hundreds of millions in losses in early 2003, it scrambled to convince lenders that it would get an invitation to join a global air alliance. Both Credit Suisse and UBS made joining an alliance a condition for new cash infusions.

Industry analysts say that while smaller Latin American and Caribbean carriers can benefit from an alliance's global advertising, sales presence and code-sharing, the investment to climb aboard the alliance bandwagon might be prohibitive. For starters, all members must have common reservations systems, which can be costly for new members. Nevertheless, over time, alliances seem to lead to more gains than losses.

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