Airline alliance

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An airline alliance is an agreement between two or more airlines to cooperate on a substantial level. The three largest passenger airline alliances are Star Alliance, SkyTeam, and Oneworld. Alliances also form between cargo airlines, such as that of WOW Alliance, SkyTeam Cargo, and ANA/UPS Alliance. Alliances provide a network of connectivity and convenience for international passengers and international packages. Alliances also provide convenient marketing branding to facilitate travelers making inter-airline codeshare connections within countries. This branding goes as far as to even include unified aircraft liveries among member airlines.[1]

Rationale[edit]

Benefits can consist of:

  • An extended network: this is often realised through code sharing agreements. Many alliances started as only a code sharing network.
  • Cost reduction from sharing of:
    • Sales offices
    • Maintenance facilities
    • Operational facilities, e.g. catering or computer systems.
    • Operational staff, e.g. ground handling personnel, at check-in and boarding desks.
    • Investments and purchases, e.g. in order to negotiate extra volume discounts.
  • Traveler benefits can include:
    • Lower prices due to lowered operational costs for a given route.
    • More departure times to choose from on a given route.
    • More destinations within easy reach.
    • Shorter travel times as a result of optimised transfers.
    • A wider range of airport lounges shared with alliance members
    • Faster mileage rewards by earning miles for a single account on several different carriers.
    • Round-the-world tickets, enabling travelers to fly over the world for a relatively low price.

Airline alliances may also create disadvantages for the traveler, such as:

  • Higher prices when all competition is erased on a certain route.
  • Less frequent flights: for instance, if two airlines separately fly three and two times a day respectively on a shared route, their alliance might fly less than 5(3+2) times a day on the same route. This might be especially true between hub cities for each airline. e.g., flights between Detroit Metropolitan Wayne County Airport (a Delta Air Lines fortress hub) and Amsterdam Airport Schiphol (a KLM fortress hub).

Issues[edit]

The ability of an airline to join an alliance is often restricted by laws and regulations or subject to approval by authorities. Antitrust laws play a large role.

History[edit]

The first airline alliance started in the 1930s, as Panair do Brasil and parent company Pan American World Airways agreed to exchange routes to Latin America. The first large alliance started in 1989, when Northwest Airlines and KLM agreed to code sharing on a large scale. The modern day alliance was started in 1990 under the African Joint Air Services (AJAS) Accord between Tanzania, Uganda and Zambia in 1990 leading to the launch of Alliance Air in 1994 with South African Airways, Air Tanzania, Uganda Airlines and the governments of Uganda and Tanzania as shareholders. A huge step was taken in 1992 when the Netherlands signed the first open skies agreement with the United States, in spite of objections from the European Union authorities. This gave both countries unrestricted landing rights on each other's soil. Normally landing rights are granted for a fixed number of flights per week to a fixed destination. Each adjustment takes negotiating, often between governments rather than between the companies involved. The United States was so pleased with the independent position that the Dutch took versus the E.U. that it granted antitrust immunity to the alliance between Northwest Airlines and KLM. Other alliances would struggle for years to overcome transnational barriers or still do so.

The Star Alliance was founded in 1997, which urged competing airlines to form Oneworld in 1999 and SkyTeam in 2000.

In 2010 Richard Branson, chairman of the Virgin Group, announced his intention to form a fourth alliance among Virgin branded airlines (Virgin Atlantic; Virgin America; and the Virgin Australia Holdings group of airlines).[2] Then in September 2011, Branson said that Virgin would join one of the existing alliances;[3] this idea was repeated in October 2012.[4] In December 2012, Delta Air Lines purchased Singapore Airlines' 49% stake in Virgin Atlantic for £224 million. This led to speculation that the Virgin group might join SkyTeam.

On February 14, 2013, it was announced that American Airlines and US Airways would merge, retaining the American Airlines name and would remain in the Oneworld alliance (and with US Airways leaving the Star Alliance group).

In South America, LAN Airlines and TAM Airlines began their merger in 2012. In March 2014, with the merger complete, TAM will leave the Star Alliance and become part of LAN in Oneworld.

Alliances[edit]

Membership and market data for the largest airline alliances

Star Alliance[5]
27 members
Founded 1997
SkyTeam[6]
20 members
Founded 2000
Oneworld[7]
15 members
Founded 1999
Rest of Industry
(Largest Airlines)
Passengers per year 637.62 million 588 million 506.983 million 1,223 million
Countries 193 178 152 204 (total countries)
Destinations 1,269 1,064 992 4,000 (total destinations)
Fleet size 4,338 4,467 3,324 11,082
Employees 439,232 459,781 391,968
Revenue Billion US$ 173.12 186.331 142.571 1,651.325 (1,550)
Daily departures: 18,000 15,723 14,011
Current Participants¹ Members
(JP) Adria Airways
2004
(A3) Aegean Airlines
2010
(AC) Air Canada
Founder
(CA) Air China
2007
(AI) Air India
2014
(NZ) Air New Zealand
1999
(NH) All Nippon Airways
1999
(OZ) Asiana Airlines
2003
(OS) Austrian Airlines
2000
(AV) Avianca
2012
(SN) Brussels Airlines
2009
(CM) Copa Airlines
2012
(OU) Croatia Airlines
2004
(MS) EgyptAir
2008
(ET) Ethiopian Airlines
2011
(BR) EVA Air
2013
(LO) LOT Polish Airlines
2003
(LH) Lufthansa
Founder
(SK) Scandinavian Airlines
Founder
(ZH) Shenzhen Airlines
2012
(SQ) Singapore Airlines
2000
(SA) South African Airways
2006
(LX) Swiss International Air Lines
2006
(TP) TAP Portugal
2005
(TG) Thai Airways International
Founder
(TK) Turkish Airlines
2008
(UA) United Airlines
Founder
Members
(SU) Aeroflot
2006
(AR) Aerolíneas Argentinas
2012
(AM) Aeroméxico
Founder
(UX) Air Europa
2007
(AF) Air France
Founder
(AZ) Alitalia
2001–2009 as Alitalia-Linee Aeree Italiane, rejoined 2009
(CI) China Airlines
2011
(MU) China Eastern Airlines
2011
(CZ) China Southern Airlines
2007
(OK) Czech Airlines
2001
(DL) Delta Air Lines
Founder
(GA) Garuda Indonesia
2014
(KQ) Kenya Airways
2007
(KL) KLM
2004
(KE) Korean Air
Founder
(ME) Middle East Airlines
2014
(SV) Saudia
2012
(RO) TAROM
2010
(VN) Vietnam Airlines
2011
(MF) Xiamen Airlines
2012
Members
(AB) Air Berlin
2012
(AA) American Airlines
Founder
(BA) British Airways
Founder
(CX) Cathay Pacific
Founder
(AY) Finnair
1999
(IB) Iberia Airlines
1999
(JL) Japan Airlines
2007
(LA) LAN Airlines
2000
(MH) Malaysia Airlines
2013
(QF) Qantas
Founder
(QR) Qatar Airways
2013
(RJ) Royal Jordanian
2007
(UL) SriLankan Airlines
2014
(S7) S7 Airlines
2010
(JJ) TAM Airlines
2014
Africa
(8U) Afriqiyah Airways
(AH) Air Algérie
(MD) Air Madagascar
(MK) Air Mauritius
(W3) Arik Air
(LN) Libyan Airlines
(AT) Royal Air Maroc
(SD) Sudan Airways
(DT) TAAG Angola Airlines
(TU) Tunisair

Asia
(G9) Air Arabia
(AK) Air Asia
(NX) Air Macau
(FG) Ariana Afghan Airlines
(PG) Bangkok Airways
(BG) Biman Bangladesh Airlines
(5J) Cebu Pacific
(LY) El Al
(EK) Emirates
(EY) Etihad Airways
(G8) GoAir
(GF) Gulf Air
(HU) Hainan Airlines
(6E) IndiGo
(IR) Iran Air
(9W) Jet Airways
(QV) Lao Airlines
(JT) Lion Air
(W5) Mahan Air
(8M) Myanmar Airways International
(WY) Oman Air
(PK) Pakistan International Airlines
(PR) Philippine Airlines
(BI) Royal Brunei Airlines
(SC) Shandong Airlines
(3U) Sichuan Airlines
(SG) SpiceJet
(9C) Spring Airlines
(TR) Tigerair
(IY) Yemenia

Europe
(EI) Aer Lingus
(BT) airBaltic
(JU) Air Serbia
(KK) Atlasjet
(B2) Belavia
(FB) Bulgaria Air
(U2) EasyJet
(BE) Flybe
(LS) Jet2.com
(IG) Meridiana
(ZB) Monarch Airlines
(YM) Montenegro Airlines
(N4) Nordwind Airlines
(DY) Norwegian Air Shuttle
(8Q) Onur Air
(PC) Pegasus Airlines
(FR) Ryanair
(XQ) SunExpress
(UN) Transaero
(PS) Ukraine International Airlines
(U6) Ural Airlines
(UT) UTair Aviation
(VS) Virgin Atlantic
(W6) Wizz Air

North America
(FL) AirTran Airways
(AS) Alaska Airlines
(BW) Caribbean Airlines
(CU) Cubana
(F9) Frontier Airlines
(HA) Hawaiian Airlines
(B6) JetBlue
(WN) Southwest Airlines
(NK) Spirit Airlines
(VX) Virgin America
(TS) Air Transat
(WS) WestJet

Oceania
(SB) Aircalin
(PX) Air Niugini
(TH) Air Tahiti Nui
(FJ) Fiji Airways
(DJ) Virgin Australia

South America
(AD) Azul
(OB) Boliviana de Aviación
(V0) Conviasa
(G3) Gol Transportes Aéreos
(EQ) TAME
Future Members
Former Members (AN) Ansett Airlines
1999–2001, defunct
(KF) Blue1
2004-2012, now a member affiliate
(BD) BMI
2000-2012, absorbed into British Airways[8]
(CO) Continental Airlines
2009–2011, merged with United Airlines
(MX) Mexicana de Aviación
2000–2004, joined Oneworld in 2009
(FM) Shanghai Airlines
2007–2010, merged with China Eastern Airlines and joined SkyTeam in 2011
(JK) Spanair
2003-2012, defunct
(TA) TACA
2012-2013, merged with Avianca
(JJ) TAM Airlines
2010-2014, joined Oneworld in 2014
(US) US Airways
2004-2014, joined Oneworld as an affiliate member of American Airlines
(RG) Varig
1997–2007, ejected
(CO) Continental Airlines
2004–2009, joined Star Alliance in 2009
(CM) Copa Airlines
2007–2009, joined Star Alliance in 2012
(NW) Northwest Airlines
2004–2009, merged with Delta Air Lines
(EI) Aer Lingus
2000–2007, left voluntarily
(CP) Canadian Airlines
Founder, 1999–2000, acquired by Air Canada
(MA) Malév Hungarian Airlines
2007-2012, defunct
(MX) Mexicana
2009 (ceased operations in 2010, but is considered an inactive member)
Quality
Average Star Rating[verification needed] 3.593 3.26 3.615 3.196
5-Star Airlines 42.857% : All Nippon Airways, Asiana Airlines, Singapore Airlines 0.00% 42.857% : Cathay Pacific, Malaysia Airlines, Qatar Airways 14.286% : Hainan Airlines
4-Star Airlines 30.556% 13.889% 11.111% 44.444%
3-Star Airlines 11.864% 11.864% 5.085% 71.186%
2-Star Airlines 0% 0% 0% 100%
1-Star Airlines 0% 0% 0% 100%
Airline Alliance Market Share By Network Capacity 2007

Notes[edit]

Notes and references[edit]

  1. ^ Fernandez de la Torre, Pablo E. "Airline alliances : the airline perspective". DSpace@MIT. Retrieved April 15, 2014. 
  2. ^ Perman, Stacy (2010-09-05). "Virgin's Richard Branson Circles His Wagons". TIME. Retrieved 2011-03-04. 
  3. ^ Bruner, Jon (2011-09-14). "Virgin Atlantic Will Join an Alliance Soon, Says Richard Branson". Forbes. 
  4. ^ Quinn, James (2012-10-26). "Virgin Atlantic to join global airline alliance, says Branson". Telegraph. 
  5. ^ "Member airline". Star Alliance. June 2013. 
  6. ^ "Facts and Figures". SkyTeam. 5 March 2014. 
  7. ^ "Oneworld at a glance". Oneworld. 12 May 2014. 
  8. ^ "Bmi Formally Leaves". Star Alliance. 2012-05-31. Retrieved 2012-10-15. 
  9. ^ "SkyTeam Associate Program" (PDF). Archived from the original on 2006-10-20. Retrieved 6 August 2014. 
  10. ^ Continental Airlines – Proud member of Star Alliance. Continental.com (2009-10-27). Retrieved on 2011-03-04.
  11. ^ "Continental Air Leaving SkyTeam Oct 24 To Join Star Alliance". money.cnn.com. 29 January 2009. Archived from the original on 2 February 2009. Retrieved 30 January 2009. 
  12. ^ "Avianca Taca Airlines - Star Alliance". Star Alliance. Retrieved 30 November 2012. 
  13. ^ "TAM and US Airways join oneworld". Oneworld. 31 March 2014. Retrieved 31 March 2014. 

External links[edit]