Airline alliances: a gentlemen’s club or smart business move
China Southern Airlines announced it will be leaving SkyTeam, a move preceded by Qatar Airways boss’ threats to exit OneWorld. Now, there are rumors that Cathay Pacific, the founding member of the very same OneWorld, is also questioning the value of airline alliances. Slowly but surely, we may be witnessing the downfall of global airline alliances.
The advantages airline alliances bring international passengers are well-known and quite compelling. Member airlines offer easy and convenient connections to a large range of destinations around the world. Airline alliances also have reciprocal earning and redeeming loyalty program benefits and in some cases, allow frequent flyer points, or miles, to be shared across different member carriers.
Alliances provide airlines a network of connectivity through codeshare agreements, allowing them to extend their flying networks. The other major benefit for airlines is cost reduction. Generally speaking, an alliance is an agreement between airlines to cooperate and pool resources. Joining an alliance can allow to save on maintenance, fuel prices, crew accommodation and more.
Here is to hoping that alliances can figure out the ‘deal breakers’ for their member airlines, and that more do not follow Qatar’s and China Southern’s suit. Establishing own joint venture partnerships may as well be a better choice business-wise for some airlines, as Oman Air believes.
Why would the national carrier of Oman not enter a major global alliance as its neighbors – Qatar Airways, Emirates (the UAE) and Saudia (Saudi Arabia) have? Oman Air maintains its position that joint ventures with codeshare partners can offer greater benefits than membership in an alliance. The airline has established partnerships with many carriers around the world, as well as keeping a special partnership with several select carriers.