Last week, Lucky from OMAAT mentioned how he believed that airline alliances were dying. Although I don’t dispute the fact that they aren’t in the best shape they have been, I still see great value from them. For many consumers, airline alliances provide a very extensive value to each member’s’ mileage currency, allows for seamless connectivity, and makes elite status more valuable.
Which are the airline alliances?
There are three major airline alliances. The smaller alliances, which OMAAT covered in a previous post, are not as important as these. They also do not function as the normal alliances do. The three major alliances are Star Alliance, Skyteam and oneWorld.
Star Alliance is the largest alliance. The major players are United, the Lufthansa Group of airlines, and Air China. There are other carriers (such as Air Canada, ANA, Air India, and Singapore Airlines) but they do not carry as many passengers as the major players. The alliance has stakes in every continent except Australia. Their elite tiers are Star Alliance Silver and Gold.
Skyteam is Delta’s alliance. I mention it as such, given that Delta owns part of Air France-KLM, Aeromexico and China Eastern, the largest carriers in the alliance. There are also other notable carriers such as Aeroflot, China Southern, Korean Air, and Saudia. The airline lack partners in Australia and in Africa. Skyteam has two elite tiers: Elite and Elite Plus.
The smallest of the airline alliances, its major players are American, British AIrways-Iberia, LAN and Qatar. There are also other large carriers such as JAL, Qantas and Cathay Pacific. The alliance has the least stringent rules regarding airline partnerships. It has three elite statuses: Ruby, Sapphire and Emerald.
Why they have value
I am a firm believer that airline alliances offer value to both airlines and customers. If an airline’s loyalty program has multiple airlines where customers can redeem their miles, the value of the program increases. If an airline can leverage their elite status value beyond their carrier, such as free baggage or lounge access, their program further increases in value.
For customers, the above mentioned aspects also add value to their loyalty. Beyond that, however, the airline’s partnerships, ability to through check baggage, and codeshares allow customers to reach farther.
I am a big fan of airline alliances. They still hold incredible value to airlines. I am not saying that Joint Ventures are more or less valuable, but I can see them both coexisting. I hope to see more airlines join, although most of the new airlines will be smaller, regional carriers. With all major airlines already members of alliances, only smaller airlines will be able to make a difference. Hopefully, these alliances will last many more years, and bring customers more value.
What do you think? Do you see airline alliances as valuable? Could the airline world do without them? Let us know!
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