The International Air Transport Association says the three major airline alliances are proving their worth as carriers cope with troubled times and look to fast-growing travel markets like China.
The three partnerships – Star Alliance, SkyTeam and Oneworld – now represent about 50 airlines in all, carrying millions of passengers and operating thousands of flights daily across 180 countries.
“Over the last decade, the alliance system has developed into a critical component of the industry. Today, alliances cover over half of global travel,” IATA director general Giovanni Bisignani told AFP.
Airline takeovers and mergers are notoriously difficult, as many countries impose limits on foreign ownership to protect their domestic markets. The alliance system was set up in part to get around such hurdles and allow member airlines to enjoy the advantages of scale provided by a bigger group.
“Alliances exist because airlines cannot offer comprehensive global coverage the way consumer brands like Nescafé or Coca-Cola do,” said Olivier Fainsilber, aviation consultant with Oliver Wyman. “An alliance will strengthen an airline’s network by reaching out to more destinations through partner carriers.”
Fainsilber says alliances offer many benefits. “Travellers tend to trust their preferred airline’s partners. They appreciate the expanded schedule choice and collect frequent traveller points for their entire journey. Everyone wins with alliances, which is why airlines and travellers like them and competition authorities accept them,” he said.
Alliances enable airlines to offer their passengers a much larger route network. For example, Air France offers about 200 destinations in the U.S. via partner Delta Air Lines while it flies direct – on its own – to just 15 U.S. cities. “Obviously, we could not serve all these destinations. It’s mutual help – we offer them our network in Europe, the Middle East and Africa, and they offer us theirs in North America,” an Air France official said.
The alliances have a keen interest in the world’s fastest-expanding markets of China and India. In China alone, authorities estimate air traffic will top 700 million passengers annually by 2020 and double thereafter by 2030.