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.
|This section does not cite any references or sources. (January 2013)|
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 (a Delta Air Lines fortress hub) and Amsterdam (a KLM fortress hub).
|This section does not cite any references or sources. (January 2013)|
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.
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. 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.
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). Then in September 2011, Branson said that Virgin would join one of the existing alliances; this idea was repeated in October 2012. 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.
Membership and market data for the largest airline alliances
|Rest of Industry
(selected major nonaligned carriers) [verification needed]
|Passengers per year||727.42 million||588 million||353.529 million||1,223 million|
|Countries||195||178||151||204 (total countries)|
|Destinations||1,328||1,064||883||4,000 (total destinations)|
|Revenue Billion US$||198.98||186.331||117.082||1,651.325 (1,550)|
|Market share[verification needed]||39.30%||24.6%||23.2%||12.9%|
(JP) Adria Airways
(A3) Aegean Airlines
(AC) Air Canada
(CA) Air China
(NZ) Air New Zealand
(NH) All Nippon Airways
(OZ) Asiana Airlines
(OS) Austrian Airlines
(SN) Brussels Airlines
(CM) Copa Airlines
(OU) Croatia Airlines
(ET) Ethiopian Airlines
(BR) EVA Air
(LO) LOT Polish Airlines
(SK) Scandinavian Airlines
(ZH) Shenzhen Airlines
(SQ) Singapore Airlines
(SA) South African Airways
(LX) Swiss International Air Lines
(TP) TAP Portugal
(TG) Thai Airways International
(TK) Turkish Airlines
(UA) United Airlines
(AR) Aerolíneas Argentinas
(UX) Air Europa
(AF) Air France
2001–2009 as Alitalia-Linee Aeree Italiane, rejoined 2009
(CI) China Airlines
(MU) China Eastern Airlines
(CZ) China Southern Airlines
(OK) Czech Airlines
(DL) Delta Air Lines
(GA) Garuda Indonesia
(KQ) Kenya Airways
(KE) Korean Air
(ME) Middle East Airlines
(PLA)Passaredo Linhas Aereas
(VN) Vietnam Airlines
(MF) Xiamen Airlines
(AB) Air Berlin
(AA) American Airlines
(BA) British Airways
(CX) Cathay Pacific
(IB) Iberia Airlines
(JL) Japan Airlines
(LA) LAN Airlines
(MH) Malaysia Airlines
(QR) Qatar Airways
(RJ) Royal Jordanian
(S7) S7 Airlines
2009 (ceased operations in 2010, but is considered an inactive member)
(AH) Air Algérie
(W3) Arik Air
(AT) Royal Air Maroc
(KC) Air Astana
(AI) Air India
(HU) Hainan Airlines
(EY) Etihad Airways
(GF) Gulf Air
(IR) Iran Air
(9W) Jet Airways
(PK) Pakistan International Airlines
(PR) Philippine Airlines
(HY) Uzbekistan Airways
(EI) Aer Lingus
(KM) Air Malta
(J2) Azerbaijan Airlines
(CY) Cyprus Airways
(LY) El Al
(OV) Estonian Air
(JU) Air Serbia
(A9) Georgian Airways
(DY) Norwegian Air Shuttle
(PS) Ukraine International Airlines
(UT) UTair Aviation
(VS) Virgin Atlantic
(FL) AirTran Airways
(AS) Alaska Airlines
(G4) Allegiant Air
(BW) Caribbean Airlines
(F9) Frontier Airlines
(HA) Hawaiian Airlines
(WN) Southwest Airlines
(NK) Spirit Airlines
(SY) Sun Country Airlines
(VX) Virgin America
(DJ) Virgin Australia
(G3) Gol Transportes Aéreos
|Future Members||Air India
Summer 2014, Avianca Brazil(subsidiary of Avianca)
First Half of 2014
|(UL) SriLankan Airlines
1 May 2014
|Former Members||(AN) Ansett Airlines
2004-2012, now a member affiliate
2000-2012, absorbed into British Airways
(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
2012-2013, merged with Avianca
(JJ) TAM Airlines
2010-2014, joined Oneworld in 2014
(US) US Airways
2004-2014, joined Oneworld as a affiliate member of American Airlines
|(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
|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|
- In 2005, SkyTeam launched its Associate Program, whereby existing codeshare agreements (such as with Continental Airlines and Copa Airlines) can be integrated into SkyTeam's marketing (shared loyalty programs, etc.) PDF.
- On June 19, 2008, Continental Airlines announced that it would be leaving SkyTeam on October 24, 2009. It began to participate in Star Alliance on October 27, 2009 as part of a codesharing agreement with Star Alliance charter member United Airlines (Continental Airlines cut its codeshare ties to Delta Air Lines and Northwest Airlines). United Airlines and Continental Airlines merged in 2010.
- As the table shows, the three alliances combined fly 60.8% of all passengers.
- Avianca and TACA, listed as separate airlines, are considered as one member of Star Alliance.
- Olympic Air joined after merging with Aegean Airlines. It is now an affiliate of Star Alliance
- US Airways is currently in the process of merging with American Airlines. The airline joined Oneworld as a affiliate member on March 31, 2014.
Notes and references
- Fernandez de la Torre, Pablo E. "Airline alliances : the airline perspective". DSpace@MIT. Retrieved April 15, 2014.
- Perman, Stacy (2010-09-05). "Virgin's Richard Branson Circles His Wagons". TIME. Retrieved 2011-03-04.
- Bruner, Jon (2011-09-14). "Virgin Atlantic Will Join an Alliance Soon, Says Richard Branson". Forbes.
- Quinn, James (2012-10-26). "Virgin Atlantic to join global airline alliance, says Branson". Telegraph.
- "Member airline". Star Alliance. June 2013.
- "Facts and Figures". SkyTeam. 5 March 2014.
- "Oneworld at a glance". Oneworld. 24 October 2013.
- "Aviation Benefits Without Borders report". Air Transport Action Group.
- "Bmi Formally Leaves". Star Alliance. 2012-05-31. Retrieved 2012-10-15.
- Continental Airlines – Proud member of Star Alliance. Continental.com (2009-10-27). Retrieved on 2011-03-04.
- [dead link]
- "Avianca Taca Airlines - Star Alliance". Star Alliance. Retrieved 30 November 2012.
- Oneworld: http://www.oneworld.com
- SkyTeam: http://www.skyteam.com
- Star Alliance: http://www.staralliance.com