Alliances Not Mergers?

Graham Dunn's Consolidation: Painful Progress, Flightglobal, Aug. 19, 2009 (available here), offers a critical account of the outmoded regulatory scheme international air carriers are forced to operate under and the limits placed on true consolidation in the market.  The story also highlights the importance of alliances in a tough operating environment and suggests that they remain more enticing for the industry than true consolidation.  Indeed, as the story points out, alliances allow carriers to cut back their capacity without abandoning markets wholesale.