Time for Airline Alliances to 'reboot'? OW, Star & SkyTeam have now been around for 12-15 years or more. In the beginning these alliances touted seamless travel experience and a closer relationship with their pax. Today, many are saying that as a marketing concept, these alliances are outdated. Yes, the alliances have benefitted carriers with group agreements on purchasing, ops and so forth, but not a lot has really benefitted passengers. Is it time that the Alliance organisations themselves took over individual FF programs? We have recently seen most carriers in each alliance re-align their points earn / reward levels and to me it makes sense that member FF programs be combined under the global alliance, rather than the individual carrier. As a primary OW deviant, does it make sense to be a member f both QFF and AAdvantage (or a Star UA & LH member etc). Surely, the consolidation under the 'parent' alliance would make earning / redemption and rewards far more efficient - and cost-effective. Your view?
Passengers get substantial benefits via the lounge network, and some limited baggage, check-in benefits
Can't see Airlines giving up the cashflow from well run loyalty programs (QFF about $1bn a year) and losing the benefits of controlling loyalty (see Simpler Fairer changes) unless of course you get mergers (eg IAG which rolled BA and IB into Avios)
Soon to be AB, IB and EI with IAG's purchase of Aer Lingus.
Whilst Alliance do need some form of an update, SA has probably led the way in terms of multi Airline integration. LHR T2 is dedicated to them, they have open joint lounges. Cant speak for Sky Team, as I have never experienced them, but I am a OW loyalist (read: QFF) and I think OW really needs to look at more joint simiplifications. The BA & AA lounge is LHR T3 is an example of what could be a single combined OW lounge. JFK might be another example, especially considering the AA/BA tie up.
Kimshep, your assertions that tweaks in airline programmes constitutes a loss of benefits is not entirely balanced or relevant.
On the contrary, "internal devaluation" to heighten differentiation and improve competitiveness within an alliance is beneficial to members across the alliance, as the opportunity cost of switching programmes is marginal.
Point is, are people just too lazy to do the ground work? How effective is an airline's effort to encourage laziness?
Actually, really thinking about it, OW could completely optimise thier operations at LHR. Terminal 3 is for all intensive purposes a OW hub (there are a few exceptions, QR @ 4, EY @2, SIN there with them in 3, etc).
But, actual savings could be realised if each airline entered into agreements to co-share the cost of ground support, lounges, baggge etc based on PAX numbers in and out of the Terminal utilising single supplies / contractors. Obviously this is a pipe dream from an arm chair Airline CEO (though I work in Project Management, so its not completely unfounded thinking). I just find it strange that within OW, different airline in the same terminal use different baggage companies, different lounges, etc.....
My original post was fairly short and somewhat conceptual, however, let me clarify a few points.
1. Not suggesting that individual FF programs are not rewarding. Indeed lounge access, baggage increases etc are acknowledged and appreciated.
2. Nor am I suggesting that individual carriers need to give up / forego revenue from their programs.
As with all things economic, there is a finite cost and benefit equation for FF programs. With 15 primary members (plus associates) in OW, 28 members in Star Alliance and 20 members in SkyTeam, that's an awful lot of duplication (think RES and award/redemption for a start) for each carrier. Some carriers play well with each other, some don't.
The point I'm looking at here is surely it would make more sense for the Alliance to consolidate all this duplication, for which the individual airlines would pay a 'subscription' fee. Airlines could also be 'rewarded' by way of rebates / incentive payments based on their number of members. All passenger earning / redemption etc would be controlled from a single space - and that space would show all available carrier inventory on each sector in that one space. Other issues I am thinking of are :
- the standardisation of 'zone' areas for points earning / redemption alliance-wide
- the standardisation of SC for fare classes / fare buckets alliance-wide
- standardisation of loyalty levels
- shared lounges (between carriers) - OW's LAX TBIT is a great example.
- paid access vs closed door policies ie: QF closed door vs AA paid access
I don't believe that this is an issue bought up by pax 'laziness' as has been suggested above. Over the years, FF programs have evolved (in both good and bad ways) so that while there is a lot of 'base' uniformity, some individual programs have become so unwieldy that even the premium members experience confusion on rules (think lounge access rules between AA and QF for instance). Similarly, I'm reminded of a post a few days ago where a member here was looking for redemption via one (A) carrier on another (B) carrier's service on a mainline route. The most sensible answer waas for that person to check the (C) BA site for availability and then ring the original (A) airline to secure seats on the desired (B) carrier. That is not efficient, friendly or seamless - and it certainly wouldn't involve the pax as being 'lazy'. It is purely a reflection of how poor the redemption process currently is.
Hence, a centralised alliance solution would tend to solve these issues ~ and others.
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Time for Airline Alliances to 'reboot'?
kimshep
kimshep
Qantas - Qantas Frequent Flyer
Member since 11 Oct 2014
Total posts 412
Time for Airline Alliances to 'reboot'? OW, Star & SkyTeam have now been around for 12-15 years or more. In the beginning these alliances touted seamless travel experience and a closer relationship with their pax. Today, many are saying that as a marketing concept, these alliances are outdated. Yes, the alliances have benefitted carriers with group agreements on purchasing, ops and so forth, but not a lot has really benefitted passengers. Is it time that the Alliance organisations themselves took over individual FF programs? We have recently seen most carriers in each alliance re-align their points earn / reward levels and to me it makes sense that member FF programs be combined under the global alliance, rather than the individual carrier. As a primary OW deviant, does it make sense to be a member f both QFF and AAdvantage (or a Star UA & LH member etc). Surely, the consolidation under the 'parent' alliance would make earning / redemption and rewards far more efficient - and cost-effective. Your view?
moa999
moa999
Qantas - Qantas Frequent Flyer
Member since 02 Jul 2011
Total posts 835
Passengers get substantial benefits via the lounge network, and some limited baggage, check-in benefits
Can't see Airlines giving up the cashflow from well run loyalty programs (QFF about $1bn a year) and losing the benefits of controlling loyalty (see Simpler Fairer changes) unless of course you get mergers (eg IAG which rolled BA and IB into Avios)
LondonAussie
LondonAussie
Qantas - Qantas Frequent Flyer
Member since 12 Jul 2014
Total posts 79
Soon to be AB, IB and EI with IAG's purchase of Aer Lingus.
Whilst Alliance do need some form of an update, SA has probably led the way in terms of multi Airline integration. LHR T2 is dedicated to them, they have open joint lounges. Cant speak for Sky Team, as I have never experienced them, but I am a OW loyalist (read: QFF) and I think OW really needs to look at more joint simiplifications. The BA & AA lounge is LHR T3 is an example of what could be a single combined OW lounge. JFK might be another example, especially considering the AA/BA tie up.
TheRealBabushka
TheRealBabushka
Member since 21 Apr 2012
Total posts 2,058
Agreed. The benefits are real!
Kimshep, your assertions that tweaks in airline programmes constitutes a loss of benefits is not entirely balanced or relevant.
On the contrary, "internal devaluation" to heighten differentiation and improve competitiveness within an alliance is beneficial to members across the alliance, as the opportunity cost of switching programmes is marginal.
Point is, are people just too lazy to do the ground work? How effective is an airline's effort to encourage laziness?
LondonAussie
LondonAussie
Qantas - Qantas Frequent Flyer
Member since 12 Jul 2014
Total posts 79
Actually, really thinking about it, OW could completely optimise thier operations at LHR. Terminal 3 is for all intensive purposes a OW hub (there are a few exceptions, QR @ 4, EY @2, SIN there with them in 3, etc).
But, actual savings could be realised if each airline entered into agreements to co-share the cost of ground support, lounges, baggge etc based on PAX numbers in and out of the Terminal utilising single supplies / contractors. Obviously this is a pipe dream from an arm chair Airline CEO (though I work in Project Management, so its not completely unfounded thinking). I just find it strange that within OW, different airline in the same terminal use different baggage companies, different lounges, etc.....
kimshep
kimshep
Qantas - Qantas Frequent Flyer
Member since 11 Oct 2014
Total posts 412
Great responses, all .. and thank you!
My original post was fairly short and somewhat conceptual, however, let me clarify a few points.
1. Not suggesting that individual FF programs are not rewarding. Indeed lounge access, baggage increases etc are acknowledged and appreciated.
2. Nor am I suggesting that individual carriers need to give up / forego revenue from their programs.
As with all things economic, there is a finite cost and benefit equation for FF programs. With 15 primary members (plus associates) in OW, 28 members in Star Alliance and 20 members in SkyTeam, that's an awful lot of duplication (think RES and award/redemption for a start) for each carrier. Some carriers play well with each other, some don't.
The point I'm looking at here is surely it would make more sense for the Alliance to consolidate all this duplication, for which the individual airlines would pay a 'subscription' fee. Airlines could also be 'rewarded' by way of rebates / incentive payments based on their number of members. All passenger earning / redemption etc would be controlled from a single space - and that space would show all available carrier inventory on each sector in that one space. Other issues I am thinking of are :
- the standardisation of 'zone' areas for points earning / redemption alliance-wide
- the standardisation of SC for fare classes / fare buckets alliance-wide
- standardisation of loyalty levels
- shared lounges (between carriers) - OW's LAX TBIT is a great example.
- paid access vs closed door policies ie: QF closed door vs AA paid access
I don't believe that this is an issue bought up by pax 'laziness' as has been suggested above. Over the years, FF programs have evolved (in both good and bad ways) so that while there is a lot of 'base' uniformity, some individual programs have become so unwieldy that even the premium members experience confusion on rules (think lounge access rules between AA and QF for instance). Similarly, I'm reminded of a post a few days ago where a member here was looking for redemption via one (A) carrier on another (B) carrier's service on a mainline route. The most sensible answer waas for that person to check the (C) BA site for availability and then ring the original (A) airline to secure seats on the desired (B) carrier. That is not efficient, friendly or seamless - and it certainly wouldn't involve the pax as being 'lazy'. It is purely a reflection of how poor the redemption process currently is.
Hence, a centralised alliance solution would tend to solve these issues ~ and others.