Are air alliances still useful?

The three main airline alliances date back to the late 1990s: 1997 for the Star Alliance, 1999 for Oneworld, and 2000 for SkyTeam. They have now been in existence for a quarter of a century, and it is possible to make an assessment of them from the outside.

First of all, it should be noted that they have not weakened over time, whereas competition between carriers in the same alliance could have led to their disintegration. This has not been the case, and they continue to weigh heavily in global air transport. Between them, the 60 member airlines operate 11,909 aircraft and fly 1.89 billion passengers, covering almost all countries. Basically, the 60 carriers—25 for the Star Alliance, 20 for SkyTeam, and 15 for Oneworld—represent a third of the world’s air transport, while they account for only 6.7% of the 900 or so scheduled airlines.

So, no doubt, this is an imposing force. How, then, is it that they have very little weight in the organization of air transport? Admittedly, the current Director General of IATA comes from British Airways, one of the founders of Oneworld. But apart from that, what roles do they play in the management of the business sector?

The first limitation of the power of alliances lies in the absence of solidarity between members. Since their creation, many member companies have been liquidated without their colleagues in the same group coming to their rescue. In no particular order, we can mention Malev, Mexicana de Aviación, Air Berlin, Spanair, and even Alitalia, to name just a few of the defunct operators. Closer to home, CSA, the Czech airline, refurbished into Czech Airlines, will disappear very soon. This is because each carrier is willing to participate in the benefits of a closed club but without losing its independence.

We also see airlines changing alliances through groupings with other carriers, such as LATAM, which left Oneworld for SkyTeam following the entry of Delta Air Lines into its capital.

Finally, while an alliance should be a defensive means vis-à-vis competitors from another alliance, nothing prevents an operator from signing interline or even code-share agreements with companies belonging to either another alliance or simply outside a group. This singularly weakens the power of alliances.

However, they are far from useless for passengers and companies. The latter, especially very large groups, are looking for a global offer that can better cover their needs than one of the three alliances, each of which covers almost the entire planet, or at least all the main markets. This can be decisive in discussions between a carrier and a potential customer. Thus, the members of an alliance can benefit from the commercial establishment of the member company in its own territory. However, what is an advantage in one country can turn out to be a weakness in another. Only the United States and China have a representative in each of the alliances; this is not the case in Europe. Air France/KLM are certainly dominant in the French and Dutch markets, but they carry much less weight in Germany, Switzerland, Belgium, or Austria, where the powerful Lufthansa group, a member of the Star Alliance, is so dominant.

There remains the interest for consumers in the validity of the Frequent Flyer Programs with all the airlines of the same alliance. The loyalty capacity of this system, which has retained all its appeal for the past forty years, cannot be underestimated. The problem arises when an airline leaves one alliance to join another, which can cause great disappointment for some frequent travelers.

I note that the best international airline is not one of the three groups; I am talking about Emirates, and this has not prevented it from becoming the world reference in air transport.

For years, the concept of wedding rings—that is, the benefits they provide to their members and consumers—has not changed. We would like the facilities offered by artificial intelligence and the incredible development of social networks to be better utilized to develop the concept.