If you are a moderately frequent flyer, then you must have heard the onboard announcement as: Thank you for flying Air X, a member of the Y Alliance.(Thank you for flying Air India, a member of the Star Alliance).
If we try to describe airline alliances in just one line it will be “Airline alliances in the aviation industry are a kind of agreement among airlines to cooperate on a substantial levels to utilize resources of each other and provide seamless travel across the globe”
Resources: Any equipment of an airline (aircraft, ground handling equipment, CUSS, CUTE, Kiosk, employee, etc.)
Code Share: A codeshare agreement, also known as codeshare, is a business arrangement, common in the aviation industry, in which two or more airlines publish and market the same flight under their own airline designator and flight number (the “airline flight code”) as part of their published timetable or schedule. Typically, a flight is operated by one airline (technically called an “administrating carrier”) while seats are sold for the flight by all cooperating airlines using their own designator and flight number.
Beginning of Alliances
The very first alliance took place in 1930, when PanAir-do-Brasil and its parent company Pan America World Airways agreed to exchange routes to Latin America which help both the carriers to expand roots and save extra expenditure substantially.
After some small collaboration, the first large scale alliance began in 1989, when NorthWest Airlines and KLM agreed to large-scale code sharing. Gradually with the passage of time and with the increase in the needs of travelling the globe other alliances formed, some got discontinued or merged with the other bigger alliances and some expanded with all capacity.
The Mantra of survival/growth of all these alliances is the amount of liberalization it can provide to an airline so that it can operate feasibly in a sector.
Benefits of Alliances
- An extended network (many alliances started code share, just to get routs of a sector).
- Cost reductions that come from sharing operation facilities (e.g. catering or computer systems), operation 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 that include lower prices due to lowered operational costs for a given route.
- Different times for travel to choose from.
- Availability of more routes.
- More destinations within easy reach.
- Shorter travel times.
- More options of airport lounges shared with alliance members.
- Faster mileage rewards by earning miles for a single account on several different carriers.
- Enabling travelers to fly over the world for a relatively low price, etc.
‘3’ Major Alliances
3.1 Start Alliance:
On 14 May 1997, an agreement was announced forming Star Alliance with five airlines on three continents: United Airlines, Scandinavian Airlines, Thai Airways, AirCanada, and Lufthansa. The alliance chose Young & Rubicam for advertising, with a budget of $25 million. The airlines shared the Star logo from the beginning, with its five points representing the founding airlines. The alliance adopted its first slogan, “The Airline Network for Earth” with its goal “an alliance that will take passengers to every major city on earth“.
Today Star Alliance’s 26 member airlines operate a fleet of approximately 5,033 aircraft, serving more than 1,290 airports in 195 countries on more than 19,000 daily departures. The alliance has a two-tier rewards program, Silver and Gold, with incentives including priority boarding and upgrades. Like other airline alliances, Star Alliance airlines share airport terminals (known as co-locations) and many member planes are painted in the alliance’s aircraft livery(paint scheme for branding or promotions).
Members of Star Alliance includes:
- Aegean Airlines
- Air Canada
- Air China
- Air India
- Air New Zealand
- All Nippon Airways (ANA)
- Austrian Airlines
- Brussels Airlines
- Copa Airlines
- Croatia Airlines
- Egypt Air
- Ethiopian Airlines
- EVA Air
- LOT Polish Airlines
- Scandinavian Airlines (SAS)
- Shenzhen Airlines
- Singapore Airlines
- South African Airways
- Swiss Airlines
- TAP Portugal
- Thai Airways
- Turkish Airlines
- United Airlines
3.2 One World
It is the second alliance to be formed in 1998, by American Airlines, British Airways, Cathay Pacific and Qantas. It in the year 2018 was marked to be the smallest, with 14 carriers and 535 million passengers. The alliance’s stated objective is to be “the first choice airline alliance for the world’s frequent international travelers“. It has its head office in New York City.
As of March 2020, its member airlines collectively operated a fleet of 3,296 aircraft, served about 1,000 airports in 170 countries, carrying over 490 million passengers per year on 13,000 plus daily departures. It is the third-largest global airline alliance in terms of passengers carried.
Members of One World includes:
- Alaska Airlines
- American Airlines
- British Airways
- Cathay Pacific
- Japan Airlines
- Malaysia Airlines
- Royal Air Marco
- Royal Jordanian
- S7 Airlines
- Sri Lankan Airlines
3.3 Sky Team
Founded in June 2000, SkyTeam was the last of the three alliances to be formed. It is the most recently alliance, founded by Aero Mexico, Air France, Delta Air Lines and Korean Air, has since grown to be the second largest by airline members and people carried on its planes.
As of January 2019, SkyTeam consisted of 18 carriers from five continents and operated with the slogan “Caring more about you”.
It also operates a cargo alliance named SkyTeam Cargo, which partners ten Carriers, all of them being SkyTeam members. Its centralized management team, SkyTeam Central, is based at the World Trade Center Schiphol Airport. SkyTeam flies to have more than 1,150 destinations in more than 175 countries and operates more than 14,500 daily flights. The alliance and its members have 750 lounges worldwide.
Members of Sky Team includes:
- Aerolíneas Argentinas
- Air France
- China Airlines
- China Eastern
- Czech Airlines
- Garuda Indonesia
- Kenya Airways
- Korean Air
- Vietnam Airlines
Running an airline is a very expensive business, and finding new routes for expansion is something which requires research, time and heavy investment too, so all these alliances are an attempt to bring the air travel to masses, by making it reasonable and efficient. This gives airlines an opportunity to discover new routes and sector by serving the passengers of another carrier. The most tedious exercise for an airline is to gather passenger and to build trust in them so that they are loyal to the respective airlines. The above mentioned alliances are the three major ones but there are other small alliances which are helping airlines and passengers too. Some of them are
- Vanilla Alliance – founded in 2015, currently has 5 members
- U-FLY Alliance – founded in 2016, currently has 5 members
- Value Alliance – founded in 2016, currently has 5 members
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