The world's airlines are gathering like flocks. They are striking alliances that allow them to span the world and offer passengers a seamless web of connections. The link-ups make it possible to schedule flights more effectively, and help carriers to pool their resources and to attract more customers. And they may be a prelude to future mergers, as price

The Star Alliance and Oneworld, are the two biggest airline link-ups in the world. Each consists of at least one major airline in each of the major air traffic regions of the world - Europe, North America and Asia.

The biggest is the Star Alliance, which combines Germany's Lufthansa with America's United Airlines, Air Canada, Thai Airlines, Brazil's Varig, and SAS Scandinavian Airlines. Recently Japan's All-Nippon Airlines (ANA), Air New Zealand, and Ansett Airlines of Australia joined the grouping.

Almost as large is British Airways Oneworld alliance, which takes in American, Qantas, Cathy Pacific and Canadian, and has recently added Finnair, Aer Lingus and Iberia.

Oneworld alliance British Airways American Qantas Cathy Pacific Canadian Finnair Aer Lingus Iberia

British Airways was hoping for a full-scale merger with American, the largest US carrier, but ran into regulatory difficulties. It also bought a significant stake in partner Qantas, the Australian carrier.

The third alliance - between Delta, Swissair and Air France - has been more troubled. It is only due to go into effect at the end of this year, and each airline needs to work out how its other partner airlines, such as Japan Airlines, Aeromexico, and Korean Airlines, will fit in.

Meanwhile, Dutch airline KLM has a smaller alliance with Alitalia and Northwest Airlines.

And within Europe, Swissair itself has founded the "qualiflyer group", which links it to Austrian Airlines, Air Portugal, Turkish Airways, and Belgium's Sabena Airlines.

Virgin's link-up with Singapore Airlines is a logical countermove to compete with such powerful rivals.

Bigger and bigger

These alliances are huge, dwarfing the rest of the airline business in scale.

Oneworld, for example, has a total fleet of 1,800 aircraft, and serves 200m passengers a year to 650 destinations in 135 countries.

If they prove attractive to passengers, and increase business, then other airlines who are not part of an alliance will feel the pressure to join.

But global alliances have not always been successful, sometimes coming apart over corporate culture clashes between airlines from different parts of the world.

An earlier attempt to link KLM, SAS, and Swissair fell apart over questions of ownership and management.

And there is the issue of how closely airlines should work together.

Risky business

Some alliances are purely "code-sharing" deals, where airlines agree to issue tickets for each other's flights.

Others involve closer collaboration, including joint spending on marketing, and rescheduling flights to make connections easier.

The alliances may be a prelude to a full-scale merger wave, which has been held back by regulatory concerns and national pride.

The airline business has been on a roller-coaster, buffeted first by the Asian crisis and then by the rising cost of oil and jet fuel.

Now the industry is gearing up to replace a whole generation of jet aircraft that are too old.

The huge costs of that operation can only add to the pressures for merger and combination - in one industry where globalisation has already arrived.