Global airline alliances rule. Whether they rock or not remains a matter of debate.
In spite of their importance to the world’s largest airlines, the trend toward global hook-ups is not widely appreciated or understood by American travelers, who tend to travel within the boundaries of their own country.
Alliances are networks of airlines which have agreed to cooperate in such areas as schedule coordination, mileage program integration, joint fares, codesharing, shared airport terminals and lounges, and so on. The goal of any alliance is to be able to fly a customer anywhere in the world on a combination of networked carriers faster and more conveniently than would be possible outside the network.
It’s been estimated that joining one of the three alliances—oneworld (American, British Airways, etc.), SkyTeam (Delta, Continental, Northwest, etc.), or the Star Alliance (United, US Airways, Lufthansa, etc.)—can generate hundreds of millions of additional dollars in annual revenues. And there are cost savings to be had as well. So the benefits to the participating airlines’ top and bottom lines are clear.
They’ve been called virtual mergers. That’s a bit of an overstatement, but certainly the alliances do blur the line between competitors and collaborators.
From a consumer standpoint, such cooperation among airlines can make for faster and easier connections (schedule coordination and shared airport terminals) and richer frequent flyer programs (enhanced levels of program integration).
But there’s also the concern that alliances contribute to the consolidation of market power in the hands of a few large airlines, reducing choice and allowing prices to rise free of competitive constraints.
Whatever the final verdict, global alliances are here to stay, and continue adding carriers to their partner lineups, each group striving to create the most comprehensive worldwide network and garner the associated bragging rights.
The latest development is the addition of China’s largest carrier, China Southern, to the SkyTeam alliance, effective November 15.
In the frequent flyer sphere, China Southern’s inclusion in the alliance means that members of its Sky Pearl Club can earn miles and take awards on any SkyTeam carrier; and members of the programs of all SkyTeam carriers can earn miles and take awards on China Southern flights. In addition, elite members of any SkyTeam airline program enjoy special benefits when flying on all SkyTeam carriers.
With the latest addition, SkyTeam now comprises the following airlines: Aeroflot, Aeromexico, Air France, Alitalia, China Southern, Continental, Czech Airlines, Delta, KLM, Korean, and Northwest, plus three Associate airlines: Air Europa (Spain), Copa Airlines (Panama) and Kenya Airways. According to the SkyTeam website, the partner airlines carry 428 million passengers a year on 16,400 daily flights covering 841 destinations in 162 countries.
Those are big numbers, no doubt. Whether bigger is better is a topic we’ll leave for another time.