Number of words: 276

We agreed, at the beginning, that we would keep this alliance as simple as possible. There were no big teams of international lawyers involved. Partners in the alliance signed a five page agreement. The alliance airlines are not handcuffed to one another. If they find over time that they are not getting the financial benefit they want, first they talk to other partners to see how that problem can be addressed. But ultimately they are free to withdraw from the alliance if it doesn’t work for them and their customers. 

The right to leave is the magnet that holds us all together. We all try harder to share the extra profit and the extra flying. It took us about a year to get the system working. We conducted surveys all over the world and came up with what we believe was a great name: Star Alliance. It now includes 13 airline partners almost filling out the globe and it has done exactly what was intended. It serves our customers well and brings us all more business and more places to fly.

So why did the alliance Idea really come from? The telephone. Make a call to Singapore and think about what happens. There could be six independent telephone companies involved in completing that call, and the customers couldn’t care less. He doesn’t have to make arrangements to shift from company A to company B and so on. He wants a clear channel to the person he is calling and one will that summarises the costs. Star alliance does the same thing.

Excerpted from Pg 251-252 of ‘Lessons from the heartland of American Business’ by Gerald Greenwald