Multilateral airline alliances: Balancing strategic constraints and opportunities

This paper explores multilateral airline alliances through the lenses of structural holes and network closure. The structural holes theory sees network ties as opportunities linking together separate network segments through brokers and weak ties. The opposing view argues that network closure would generate superior “social capital” and thus superior “economic rent” as we would have more trust, reputation and cooperation within a closed group with strong internal ties. We discuss these theories in the context of multilateral airline alliances and argue that the two concepts in combination advance our ability to explain alliance processes in the airline industry.