Airline Alliances: who’s signing up in 2014 and beyond? oneworld
"2014 has already seen
oneworld complete the biggest
expansion programme since
its launch 15 years ago,” says
Michael Blunt, vp corporate
communications.
SriLankan Airlines joined
on May 1 as the first carrier
from the Indian subcontinent
to enter any of the global
airline alliances. The addition
brings two new airports on
to the alliance network –
Hambantota and Tiruchirapalli.
With an extensive schedule
serving southern India and
the Maldives, SriLankan also
significantly strengthens
oneworld’s presence
throughout south Asia, one
of the world’s fastest growing
regions for air travel demand.
TAM Airlines, the main
airline in Latin America’s
leading economy, Brazil,
joined oneworld on March
31, alongside its partner in
Latam Airlines Group, LAN
Airlines. The addition of TAM
consolidates oneworld’s
position as the leading alliance
for flights within Latin America
and between the region and
both the United States and
Europe.
US Airways also transitioned
to oneworld from Star Alliance
at the end of March, following
its merger with American
Airlines. Although American
Airlines already boasts plenty
of well-established stateside
routes, US Airways has
improved connections to and
along the US east coast due
to its hubs at Washington's
Reagan National Airport (DCA),
Philadelphia and at Charlotte
in North Carolina.
In 2013, several airlines
joined the alliance. In October,
Qatar Airways joined oneworld
as the first of the big three
Gulf carriers to join any global
airline group. Malaysia Airlines
joined on February 1.
For the future, oneworld is
considering the addition of a
carrier from mainland China.
Michael adds: “Potentially
there is space for another
African carrier within oneworld,
besides British Airways’
affiliate Comair in the south,
the coverage we have of
the continent through Qatar
Airways and our other member
airlines. But there is no rush
on either front.”
Now that the alliance’s
main period of expansion
is successfully completed,
oneworld’s focus will shift
towards improving customer
offerings and building revenues
for its member airlines. “As
they say in the advertising
business, watch this space!”
says Michael.
Star Alliance
Air India is at the centre of
Star Alliance’s expansion
plans for 2014. This is its
second attempt at joining
Star Alliance after its
previous application was
suspended in July 2011.
Star Alliance ceo, Mark
Schwab, announced that
Star members would hold a
meeting in London on June
23 to formalise the approval
for Air India, which could
become a member as soon
as July.
He said during a recent
press conference in
Mumbai: “We still have
some work to do but I don’t
see any barriers. Without
giving a specific date,
one can say that we will
complete all the groundwork
and formalities of Air India’s
entry into the Star Alliance
club by this summer. After
that, they will be ready to
join straight away.”
Mark said Star Alliance
had long held the opinion
that India was an important
aviation market that should
be fully represented in
the alliance but that the
level of change in the
domestic market in recent
years did not make it easy
for an airline to become
an alliance member.
“The market in India is
now showing signs of
stabilisation. Today we
see an Air India that has
successfully completed its
merger with Indian Airlines
and is building up a new
fleet that forms the basis
for a much-improved level
of service. This is why we
believe the time is now
right to recommence the
integration process.”
Also on the cards for
the second quarter of
2014 is the integration of
Avianca Brazil, a sibling
of current Star member
and Colombian flag-carrier,
Avianca.
Besides expansion plans,
Star Alliance has also
focused on enhancing its
customer service. The
alliance recently introduced
four additional round the
world (RTW) fare levels.
Customers can now choose
from a total of 14 RTW
fares; three for travel in
first class, four for travel in
business class and seven
for travel in economy class.
The alliance has also
improved its Conventions
Plus product for delegates
and organisers.
Delegates have a wider
range of fares to select
from, the booking fee for
the online tool has been
eliminated, and organisers
benefit from a new support
programme and a more
simplified contracting
scheme.
“We have seen that the
conventions and meetings
travel market has been
one of the most reliable
market segments in our
own company’s 17-year
history. We have managed
to achieve year-on-year
growth – both in terms
of contracted events and
delegates travelled – ever
since we introduced
Conventions Plus in 2002,”
said Horst Findeisen, vp
commercial and business
development at Star
Alliance.
IHG joins up with airline alliances
GUESTS of the IHG
hotel group can redeem
points earned from hotel
stays and services, on
hundreds of airlines
worldwide. Local IHG
properties are Crowne
Plaza Johannesburg The
Rosebank and Holiday Inn
Sandton, Rivonia Road.
Brent Kinnear,
commercial director, says:
“Hotel guests can earn
loyalty points by staying
at our hotels. Points can
be redeemed for free
flights anywhere with our
airline partners, which
total more than 400
worldwide. There are no
blackout dates.”
He says the Rewards
programme is an industry
leader in incentives
and a great example of
a programme that has
done a spectacular job
of forging partnerships
that customers can truly
benefit from.
SkyTeam
SkyTeam has brought only
one new member on board
this year.
Garuda Indonesia joined
the alliance on March 5.
Garuda’s membership adds
Jakarta as an alternative
gateway to and from southeast
Asia, as well as 40 new
destinations to SkyTeam’s
global network. “Garuda
Indonesia’s domestic
and growing international
network will give SkyTeam a
footprint in Indonesia as we
strengthen our presence in
the south-east Asia region,”
says SkyTeam md, Michael
Wisbrun.
For the future, SkyTeam
is looking towards Brazil
and India. SkyTeam
spokesperson, Chris Karanja,
told TNW: “In the past we
have mentioned Brazil and
India as two white spots.
However we see positive
developments in Brazil.
Bilateral ties exist between
individual member airlines
and low-cost airline GOL,
already providing access
to over 60 destinations
throughout this market.
Regarding India, we are
monitoring developments with
many fundamental changes
witnessed lately.”
SkyTeam will also start
focusing more on customer
service products. Michael
says: “With our global
network almost complete,
our priority is now shifting
to creating a seamless
travel experience for our
customers. SkyTeam’s key
driver so far has been on
gaining global presence, and
now provides a network with
access to the most relevant
traffic flows worldwide. But
the next stage of co-operation
is about developing customer
products and services that
bring seamlessness to a new
level.”
In January this year
SkyTeam launched an online
booking tool for customers
wishing to book a ‘Go Round
the World’ pass on any of its
19 member airlines. Available
on Skyteam.com, the intuitive
tool offers customers a
seamless planning and
booking experience with
cost-effective fares and
access to 1 024 destinations
worldwide.
Chris says: “Our main focus
continues to be offering
an enhanced customer
experience so that we
can become the preferred
alliance of millions more
global passengers. Our
focus remains on building
a truly consistently superior
customer experience. Our
focus will be on SkyTransfer
programme, which enhances
seamlessness and efficiency
for our 26m passengers
connecting across the
alliance annually. We will
implement different projects
across the 11 leading hubs
within the alliance – ATL,
MEX, JFK, AMS, CDG, FCO,
MAD, CAN, PEK, PVG and
SEL. More details will be
shared soon.”
Is Etihad building the fourth alliance?
ALTHOUGH Etihad has
always refused to join
one of the three big
airline alliances, travel
industry players around
the world suggest the
airline might just be
building the fourth
alliance.
Etihad has been working
hard on its effort to
dominate the world, and
its ‘alliances’ are growing
rapidly. Whereas the big
three global alliances are
based on co-operation
between separate entities
with a joint venture or
two thrown in, Etihad
has opted for a different
tactic, called the equity
alliance.
Maurice Phohleli,
Etihad Airways vice
president Africa SubSahara
and Indian
Ocean, says the main
difference is that where
commercial arrangements
are largely focused on
revenue growth, equity
investments are about
cementing partnerships
and opportunities
for the successful,
profitable development
of the airlines. “Our
minority shareholdings
have allowed us to
develop and introduce
wide-ranging revenue
and business synergy
opportunities, with
significant cost
savings and efficiency
improvements coming
through network
alignment, resource
sharing, joint fleet and
engine procurement,
standardised practices,
product development and
marketing initiatives –
the sort of benefits
previously available
only through mergers or
takeovers.”
So far, Etihad has
taken minority stakes in
seven airlines – airberlin,
Air Serbia, Aer Lingus,
Air Seychelles, Etihad
Regional, Jet Airways
and Virgin Australia. The
tactic seems to be paying
off. Etihad Airways raised
its profit by 48% with nett
profit reaching US$62m
(R641m) in 2013.
According to Maurice,
Etihad Airways has
deliberately chosen not
to join one of the major
global airline alliances,
as the airline believes
it can achieve more
with its own strategy of
working with identified
partners, to create a
wide-ranging global
network that connects
to and through its
strategically positioned
hub in Abu Dhabi. He
adds: “We do, however,
partner with airlines
from all the major global
airline alliances and
have codeshare or other
partnering arrangements
with members of each
alliance.”
Etihad has established
bilateral commercial
agreements with 47
codeshare partners,
providing the airline with
a combined network of
over 420 destinations,
more than any other
Middle Eastern airline.
Etihad is planning to
pursue its strategy of
minority investments.
Says Maurice: “In 2013,
partner airlines added
significant value to
our business – with a
contribution of US$820m,
or 21% of our overall
passenger revenue.”
