The development of air transportation leads to the rapid increase of competition in the relevant market. Customers tend to use a wider variety of criteria in the selection of a carrier process, which results in in-flight services becoming a more significant aspect of competitive advantage than ever. Airline companies are establishing lists of strategies to provide high-quality services. However, the complicity of the logistics behind such services may be too high for an airline company to rationally manage, which may lead to unreasonably rising costs and even losses.
Cooperative work with a third-party logistics provider may be the solution to the mentioned increasing logistic difficulties. Such third-party providers specialize in logistics; therefore, they may benefit from their experience and time-tested strategies. In addition, logistic companies may benefit from economies of scale, leading to lower costs and higher profitability. Logistic partners can also provide airlines with various IT solutions, including aircraft monitoring or vehicle and driver information, allowing price and operational efficiency to increase. Moreover, such collaboration may maintain a synergic effect, profitable for both the airline company and the third-party logistics provider.
In the case of DHL and SATS, cooperation may lead to an improvement of the supply chain. SATS may become able to provide a higher range of in-flight meals while reducing storage and market forecasting costs (Singh et al, 2018). In addition, DHL may contribute to the development of the supply chain by generating revenue from waste recycling. Overall, synergic interaction between the two mentioned companies can minimize their weaknesses and maximize their strengths, increasing profitability and benefiting both corporate partners.
Singh, R. K., Singh, R. K., Gunasekaran, A., Gunasekaran, A., Kumar, P., & Kumar, P. (2018). Third party logistics (3PL) selection for cold chain management: A fuzzy AHP and fuzzy TOPSIS approach. Annals of Operations Research, 267(1), 531-553. Web.