Abstract
Abstract Recently strategic cooperations are the one of the frequently used tools by businesses in increasing competition atmosphere. Firms choose these cooperations in markets where the operational costs are high. Through cooperations they can utilize from economies of scale, economies of scope, reduce costs so that they can increase profitability. Additionaly the low rate of capacity usage, high costs and increasing number of low cost firms in aviation sector lead firms for forging partnerhips and this created huge alliances such as Star Alliance, OneWorld and Sky Team. In this paper it is aimed to find out whether Turkish Airlines participation to Star Alliance in 2006 with signing engagement letter has made any structural break on firms profitability or not. In this frame, Turkish airlines financial data; acid-test ratio, leverage ratio, asset turnover ratio and operational data; number of revenue passengers and number of landing which belong to last 21 years are modelled on firms return on equity. At the end of analysis it is found that aforementioned cooperation has increased Turkish airlines profitability and caused structural break on firms return on equity.
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