After the deregulation of the airline industry new actors entered the market and among them were the low-cost airlines. These actors are not involved in the same traditional airline alliance used by the traditional airlines to strengthen their position on the market.

Little research has been made regarding the benefits for low-cost airlines to engage in strategic alliances. The purpose of this thesis is to evaluate if low-cost airlines benefit from engaging in strategic alliances or collaborations, and identify possible alliance configurations.

To fulfill the purpose we have used a qualitative method and case studies. Interviews with respondents from two low-cost airlines as well as an airline industry field expert were used to gather information about the thesis subject.

We have concluded that the low-cost airlines in this study benefit from engaging in strategic alliances. The low-cost airlines are using vertical as well as horizontal alliances principally to gain cost-reduction or efficiency benefits. Both cases were against traditional airline alliances due to the high costs involved, and the fact that they do not share the same motives for alliances.