The proposals are merely extensions to a historical series of alliances linking international airlines. In fact, the airline industry is unique in that its need to form collaborative arrangements has been important almost from the start of international air travel because of regulatory, cost, and competitive factors. In recent years, this need has accelerated because of airlines' difficult profit performance.
In effect, the airlines have been squeezed. First, costs have risen, particularly due to oil prices and the need for greater security since 9/11. While pre-departure airport passenger-security checks are well publicized, some other costly airline security processes are not, such as providing governmental agencies with advance passenger information and working with freight forwarders and supply-chain operators to ensure the safety of cargo shipments carried on passenger aircraft. Second, a long-term trend toward greater price competition hinders airlines' ability to pass on increased costs to passengers-a situation exacerbated by the emergence of discount airlines and customers' ability to search the Internet for lower fares. Third, with the global recession curtailing passenger demand the airline industry has added capacity sparingly. Although the growth in international passenger jet travel has largely spurred globalization, no airline has sufficient finances or aircraft to serve the whole world. Yet passengers are traveling the whole world and perceive an advantage in booking on airline connections that will minimize both distances and connecting times at airports while offering reasonable assurance of reaching destinations with checked luggage more or less on schedule. Thus, airlines have increasingly worked together to provide more seamless experiences for passengers and to cut costs.