BA, Emirates chiefs doubt the future of airline alliances

By David Flynn , November 9 2016
BA, Emirates chiefs doubt the future of airline alliances

It's neither unusual nor unexpected to hear Emirates questioning the need for global airline alliances such as Star Alliance, Oneworld and SkyTeam... but when the chief of British Airways' parent IAG says they're on the way out, that's one from left field.

BA, alongside Qantas and Cathay Pacific, was a founding member of Oneworld almost 20 years ago.

However, IAG chief executive officer Willie Walsh reckons Oneworld won't be around to blow out the candles on its 30th birthday cake.

Speaking overnight at London's World Travel Market expo, Walsh said that “alliances add value today but I would question whether they will continue that in the future. There was a need and there still is a role for them to play but I would be surprised and question whether they will exist in 10 years from now."

Instead, the future will be paved with bespoke arrangements between individual airlines.

"I think relationships have changed and you are seeing more deals such as joint ventures," Walsh added.

Emirates' president Tim Clark, speaking at the same travel conference, opined that alliances may well survive "but take a different format."

“They are a tad anachronistic and we are moving into a B2C age now where technology runs nearly everything and how that figures in the alliance structure is questionable."

What's your take: are today's airlines alliances as useful to you, as a business traveller and frequent flyer, as joint ventures or bespoke partnerships?

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Air Canada - Aeroplan

28 Apr 2015

Total posts 11

I hope not..then again I gave up One World years ago. Star Alliance has been good to me for 15yrs (and I've been a gold flyer all that time). I've been loyal and enjoyed the benefits of that loyalty. What the alliance members offer is major selling point for me when booking flights.

QF

11 Jul 2014

Total posts 491

Try using your Qantas perks with different One World partners is a task in itself and same applies to Virgin with it's partners. I find it's easier to plan the airlines around the trip rather then the trip around alliances. 

Qantas - Qantas Frequent Flyer

15 Mar 2016

Total posts 169

For Asian and ME airlines, who wield a lot of power, alliances aren't that essential - they can fly to most countries in one leg. I'm surprised about BA. their reach is large but they do get a lot of alliance and codeshare traffic historically. If the alliances dissolved, I'd love to see a QF SQ partnership. Dare to dream! 

31 Mar 2016

Total posts 644

@ajstubbs:

"If the alliances dissolved, I'd love to see a QF SQ partnership."
The day we see a hypothetical QF+SQ partnership/alliance will be the day we see SQ completely abandoning VA stakes and QF giving up on EK+nearly 100 nonstop links fm the DXB mega hub to everywhere fm the Mid-East region to as far westward as the U.S. W.coast......will be a very interesting global network penetration trade-off for QF.

Qantas - Qantas Frequent Flyer

15 Mar 2016

Total posts 169

I know that, it was a fairly simple comment based around QF and SQ being my favourite airlines and, collaboratively, having access to most places with good planes, great staff and excellent lounges. 


Partnerships being the apparent future norm, rather than alliances, it would surprise me if SQ and VA stayed close - VA has such a limited network, if SQ had to pick one partner airline, it's not likely to be them!

Qantas - Qantas Frequent Flyer

28 Oct 2011

Total posts 381

He's not saying that working alliances per se would be at an end; he's saying that there would be individual partnership arrangements between airlines, not the "all in" approach we have now. We already see a move towards this, such as QF's partnership with EK (external to oneworld) and airlines (such as CX) not wanting to co-operate too much with other airlines in their alliances.

Qantas - Qantas Frequent Flyer

26 Jun 2014

Total posts 38

Remember - Willie Walsh is now running a virtual low cost airline - so no surprises about his perception of premium airline alliances.

31 Mar 2016

Total posts 644

@davar:

"Willie Walsh is now running a virtual low cost airline - so no surprises about his perception of premium airline alliances."
Which happens to be also a perception more aligned with the actual mkt trend worldwide in recent yrs.

The LCC mkt segment, regardless of long or short haul and across wherever geog regions, has been growing @ a rate multiple times of the traditional FSC(Full Service Carrier)  segment.  In contrast, growth of the premium/hi-end corp travel segment has been stagnating or even contracting in some  cases(e.g. F class demand).

Qantas - Qantas Frequent Flyer - Chairmans Lounge

01 Sep 2011

Total posts 387

We're seeing traces of a break up now as carriers in the same alliance refuse to check thru baggage if one is on different tickets with airlines in the same alliance and we see so many airlines making their own associations outside their own alliances. 

31 Mar 2016

Total posts 644

@crosscourt:

"...carriers in the same alliance refuse to check thru baggage if one is on different tickets with airlines in the same alliance."
That's a very very benign/subtle/passive form of alliance partners abandoning coop with each other.  At the other extreme, we've been seeing fellow alliance partners actively fighting hi-profile & very public wars against each other such as the long-running spat QF Group vs CX Group and AA joining forces with DL+UA in their powerful lobbying campaign to restrict the Gulf Big3 to access the U.S. mkt......despite QR being a OneWorld buddy and partially owns IAG where BA was a founder of OneWorld itself....

"...so many airlines making their own associations outside their own alliances."
In this aspect, QF is certainly a pioneer:  Going to bed with EK and dating MU(SkyTeam) on a regular basis despite nominally married to OneWorld.....I believe the only OneWorld family members QF is still truly faithful to is AA(see Trans-Pcf JV)+JL(see JetStar Japan).

Qantas - Qantas Frequent Flyer

09 Jun 2011

Total posts 91

With bespoke arrangements between individual airlines you'd never know what benefits and perks would be applicable to the partner airline when you travel. The alliances may not be that consistent but at least there are some things you can rely on.

CX

05 Jun 2012

Total posts 125

Frankly I wish BA would just leave oneworld.  They don't like participating in alliance benefits (hence, for instance, the fact that they were the first to contract out of lounge access rules, and currently contract our of priority baggage rules) and reportedly were behind the recent decision by oneworld to drop through-checking of baggage on separate PNRs.  Good riddance, I say, perhaps then oneworld could go back to where it used to be.

04 May 2016

Total posts 34

I bet this does not reflect Willie's unbiased observation that alliances will cease to exist; more likely it reflects his hope / deliberate intention. He wouldn't say that unless he has analysis that tells him that it would be cheaper for BA not to be in OneWorld. Especially if they continue to water down the benefits to pax. My response to the decreasing value of OW was to take all my business across to Star Alliance airlines. I would not do business with an airline that did not offer me alliance-wide benefits.

British Airways - Executive Club

24 Mar 2016

Total posts 4

It is probably more a case that Willie sees people holding BA Exec high tier with the majority of points earned on the likes of CX or QR

10 Aug 2015

Total posts 118

Be fascinating to hear what the MD of Lufthansa thinks about the future of alliances given both their multi brand model and competition from Turkish Airways

10 Aug 2015

Total posts 118

Oh and for the OW photo editor ... men can be cabin crew too.

12 Dec 2012

Total posts 994

That isn't an edit. It's an official oneworld publicity photo, likely taken at the IATA meeting in DOH in 2014.

United Airlines - Mileage Plus

13 Mar 2015

Total posts 79

I have seen them as a very good idea but very bad executed to work as they should me. The worst of all is SkyTeam where you are part of DL but if you fly CZ or MU you would not get miles or just few miles. The same in Star Alliance, as GOLD member you discrepancies on the miles earning and benefits


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