The sluggish airline industry in America and Europe has pushed major i
nternational carriers to offer bargain fares and concessions in order
to survive. Though Asian airlines are performing well and are profitab
le, the global competition has increased pressures considerably and le
d to reforms in the regional market. After reviewing the drivers that
are causing change and affecting airline performance, the discussions
shifts to the emerging strategic alliances between carriers. The intro
duction of frequent-flyer programmes in Asia serves as an illustration
of how regional airlines are attempting to cope with the challenge of
global competition.