Executive Traveller exclusive
This has been a year like no other, with travel significantly cut back – if not halted all together – and airlines looking to new strategies to save cash, while still retaining customers.
It’s a key focus for the global alliances as well: particularly Oneworld, which is not only in the midst of planning and building a network of alliance-brand lounges, but also encouraging its member airlines to make better use of the lounges already in place, through consolidation.
Speaking with Executive Traveller from his New York office, Oneworld CEO Rob Gurney acknowledges that “as tragic as the virus has been, and the catastrophic impact it's had across the world … how do we take what is a very bad thing, use as an opportunity to look at things through a fresh lens?”
“COVID-19 presents an opportunity to do things differently going forwards,” ponders the Oneworld boss, while mapping out the alliance’s lounge strategy, and the opportunities its soon-to-be member Alaska Airlines will bring.
Moscow lounge still en route, but may not arrive first
In 2019 – after more than a year of speculation about where Oneworld would plant its first ‘lounge flag’ – the alliance declared Moscow’s Domodedovo Airport would take the honours, with details and an opening date first expected in 2020.
But with the disruption COVID-19 has had on airlines and international travel, Moscow may no longer be crowned winner of the lounge race.
“It's still the plan to have Moscow as a lounge,” Gurney is quick to assure, “but whether it'll be the first one or not, I think it is an open question,” Gurney teases.
At the time Oneworld made its Moscow announcement, “we had a number of lounges (planned), and the opportunity in the pipeline at that point in time saw Moscow the one we moved forward with first.”
The alliance has never publicly confirmed the other locations being seriously considered for a Oneworld lounge, although industry commentary has previously put a spotlight on places like Berlin’s new Brandenburg Airport, and Seoul’s Incheon Airport.
Brandenburg, and other similar airports
As a brand new airport in a city (and country) no longer home to any Oneworld alliance member – at least, not since Airberlin stopped flying in 2017 – Brandenburg Airport always looked a likely fit with Oneworld’s strategy.
When asked about Brandenburg specifically, Gurney wouldn’t be drawn into confirming those suspicions, or indeed, denying that talks were taking place: except to say that beyond Moscow, “there are other lounges in 'part one' (of the plan), because it was never intended just to be one.”
“Oneworld, one lounge, that wouldn't make a lot of sense!” he quipped.
“Like most things, if an opportunity is there to do it, we would certainly review it: and if the economics made sense, and it made sense from a customer point of view, of course we would look at it,” Gurney added, while speaking generally about the assessment process for planning a new lounge, rather than Berlin in particular.
Gurney also explained that any Oneworld-branded lounge opening would always hinge on an airport’s willingness to work closely with the alliance, as well as cooperation from its member airlines to use that lounge, versus a contract space or other facility.
“We're some way away from making any significant announcements on (new lounge openings). I don't mean years, but it's not days away: somewhere in between,” hints the Oneworld boss.
“I'm pretty sure that we would have one or two of these opportunities bottomed out relatively quickly, and would make announcements around that time.”
COVID-19 invites a change in priorities
Earlier this month, Executive Traveller reported that Oneworld was reviewing opportunities for lounge ‘consolidation’ at some airports where several alliance airlines currently operate their own unique lounge, particularly when those lounges are all in the same terminal.
That focus would mark a change in priorities for Oneworld – which had previously prioritised opening branded lounges in terminals where its member airlines didn’t already offer the same.
(Moscow, while appearing to be at odds with this, still followed that strategy, as home carrier S7 Airlines primarily operates a short-haul network, with an S7 lounge only in the airport’s domestic departures area, not in the international wing where Oneworld’s lounge will be located.)
Speaking with Executive Traveller, Gurney elaborates on his earlier comments:
“COVID-19 is an opportunity to expand that thinking (on lounges) into airports that perhaps weren't a priority before, but where there may be opportunities to do that.”
The choice to consolidate versus retaining an airline-branded lounge “will come down to what the member airline's own priorities are, and if it makes sense commercially and delivers at least as good as – and ideally, a better customer proposition – then we would move in that direction.”
“That's not to say that you would, in every airport where we had multiple airlines with lounges, somehow consolidate those and integrate them into a Oneworld lounge: that's not what I'm saying. But, there will be opportunities, I think in some airports to, to revisit that.”
Smaller lounge footprints align with smaller airline networks
With practically every airline in the world currently operating in ‘cost cutting’ and ‘survival’ modes, the exercise does provide an opportunity for carriers to reconsider how they operate across the board.
As many airlines wind back routes and flights – some for the longer term – lounges that were financially justifiable prior to COVID-19 may no longer be so: and that’s where airlines could work more collaboratively.
“We know that the vast majority of airlines, if not all of them, will emerge from COVID-19 smaller than before,” Gurney believes.
“And so in the same vein, as every airline is looking at their own operations, we've been looking across what opportunities there might be, or a more inventive, cost-effective lounge model as we go forwards: and it's just common sense to do that.”
Gurney stresses that travellers won’t see consolidation at every airport, and that many of the alliance’s members will continue to operate own-brand lounges even at ‘outstation’ locations for strategic reasons or to better-suit their customer base.
Any consolidation efforts would “not be about reducing the customer offering: it's how can you actually improve it, but deliver it more efficiently,” Gurney observes.
“When you look at airline lounges around the world, there are many airports where we have multiple airline lounges operating by member airlines, all in the same terminal that could be managed more efficiently.”
One key barrier to any consolidation efforts will always be an airline’s existing lease arrangements at each airport, as lease terms for lounge spaces – and even for the use of third-party contract lounges – can require multi-year commitments.
Alaska Airlines brings new lounges, travellers into Oneworld
While alliance-branded lounges have been a key focus for Oneworld as of late, another has been the integration of Alaska Airlines into the alliance: and the lounges, and frequent flyer members, that Alaska brings to the fold.
Oneworld confirmed this month that Alaska will become a full alliance member in March 2021, by which time, eligible frequent flyers will be ‘good to go’ at lounges across the world.
“If an Alaska Airlines customer turns up in Tokyo, or in Sydney, we really want to make sure that the customer is going to be recognised as a Oneworld member,” Gurney shares.
“We have just one goal in mind, and one goal only: to really make sure that the customer experience (with Alaska Airlines, and for its members) is what's been promised. I think we're in a good position, because Alaska has very strong bilateral relationships with a number of the Oneworld carriers already.”
Gurney confirmed the alliance was still working through some aspects of Alaska’s membership, including how its airport lounge policies would play out: given the other US member of Oneworld, American Airlines, implements a range of non-standard policies for the same.
For example, AA doesn’t typically grant its own frequent flyers lounge access on itineraries for travel within North America: unless those travellers purchase an Admirals Club membership.
It remains to be seen whether Alaska Airlines will adopt that same policy under Oneworld, to avoid AA frequent flyers from overcrowding Alaska’s lounges, at airports where they’re not eligible to enter an American Airlines lounge.
“That's the very detail that we're working through right now as part of the onboarding process,” Gurney says, while highlighting that “these things are still being determined … and we don't want to send (the wrong message) out to customers,” before decisions on such policies have been finalised.
“I think Alaska is a wonderful airline,” Gurney continues.
“For Oneworld, it puts us in a very strong position up and down the US West Coast, it puts us in the clear number one position as an Alliance in cities like Los Angeles, Seattle and Portland, and escalates our positioning at airports like San Francisco … so it's, very, very good all around.”