ANALYSIS OF THE IMPACT OF DOMESTIC AIRLINES STRATEGIC ALLIANCE TOWARD COMPANY PERFORMANCE (STUDY CASE IN X – Y GROUP ALLIANCE)

Abstract

One of the ways for airline firm to survive is by forming a strategic alliance where two or more independent firms come to an agreement of sharing each resource to reach common objectives. Purpose of the study is providing insight regarding the type and characteristic of domestic strategic alliance in Indonesia’s aviation industry and the impact of it for company’s performance. Case study approach implemented to explore the depth of phenomenon of domestic strategic alliance. The Formation, Operational, and Evaluation Phase are being investigated to further see the impact of alliance toward the performance. Additionally, the performance is being measured by BSC in order to measure the performance as a whole. Qualitative study method carried out in this study. Data was collected through interviews on 8 higher management from both firms who have knowledge on the alliance. It was discovered that unclear agreement during formation phase caused conflict and alliance to be terminated prematurely. It is recommended to continue alliance until the objective is fulfilled or find another business activity to continue operation despite the hurdle.