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  • special report:alliances 2013

    september 2013

  • Major events have reshaped the alliances networks such as TAMs decision to leave Star for Oneworld, soon be joined by one of the Gulf mega-carriers, Qatar Airways. North Atlantic joint ventures have developed further with the tie-up between Delta and Virgin, while the pace of liberalisation in aviation remains frustratingly slow

    SPECIAL REPORT ALLIANCES

    ightglobal.com/airlines September 2013 | Airline Business | 29

    30 Changing partners A graphical snapshot of orbital changes around the alliances

    32 Joined-up thinking How transatlantic partnerships are developing further

    36 Alliance survey Our annual analysis and survey of the worlds codeshares and

    partnerships for the three major alliances and leading unaligned carriers

    41 Choosing wisely Partnerships that drive volume are not necessarily pro table

    42 Laboured progress Liberalisation is a slow process encumbered by self-interest

    CONTENTS

    All our special reports are available online at fl ightglobal.com/airlines

    Rex

    Feat

    ures

  • ightglobal.com/ab ightglobal.com/ab

    ALLIANCES SNAPSHOT

    September 2013 | Airline Business | 3130 | Airline Business | September 2013

    Xxxxx xxxxx xxxxxxx IT, read our analysis with Lion Air chief executive Xxxxxxx Xxxxxxxxxx fl ightglobal.com/??????????

    Joining 2014

    Joining 2014

    Joining 2013

    Equity and codeshare deal with Air Berlin

    JV with Qantas

    Leaving Star to join Oneworld through

    LATAM merger

    Leaving Star to join Oneworld through American merger

    Partnerships with SIA and Air New Zealand

    Partnership with Delta

    Codeshare with Air France-KLM

    JV with Delta

    JV with Delta

    EMIRATES

    CHANGING PARTNERSAn increasing taste for mergers and joint ventures, both inside and outside the major groupings, continues to see the evolution of the alliance worlds

    SRILANKAN AIRLINES

    HEADER: ALLIANCES: SNAPSHOT HEADLINE: CHANGING PARTNERS STANDFIRST:An increasing taste for mergers and joint venture, both inside and outside of the major groupings, continues to see the evolution of the alliance worlds Some small correction on the text boxes next to the circles: ONEWORLDFor Etihad can we change the word-ing to: Equity and codeshare deal with Air BerlinFor TAM can we change the wording to: Leaving Star to join Oneworld through LATAM mergerFor US Airways can we change the wording to: Leaving Star to join One-world through American merger SKYTEAMGO! Should be GOL (there is an airline Go! By the way) and can we change the wording to:Partnership with Delta STAR ALLIANCESVirgin Australia can we change the wording to: partnerships with SIA and ANZ

    VIRGIN AUSTRALIA

    VIRGIN ATLANTIC

    ETIHADUS

    AIRWAYS

    TAM

    VIRGIN AUSTRALIA

    GARUDA INDONESIA

    QATAR AIRWAYS

    GOLETIHAD

    STAR ALLIANCE

    SKYTEAM

    ONEWORLD

    28 MEMBERS

    18 MEMBERS

    12 MEMBERS

  • ightglobal.com/ab ightglobal.com/ab

    ALLIANCES SNAPSHOT

    September 2013 | Airline Business | 3130 | Airline Business | September 2013

    Xxxxx xxxxx xxxxxxx IT, read our analysis with Lion Air chief executive Xxxxxxx Xxxxxxxxxx fl ightglobal.com/??????????

    Joining 2014

    Joining 2014

    Joining 2013

    Equity and codeshare deal with Air Berlin

    JV with Qantas

    Leaving Star to join Oneworld through

    LATAM merger

    Leaving Star to join Oneworld through American merger

    Partnerships with SIA and Air New Zealand

    Partnership with Delta

    Codeshare with Air France-KLM

    JV with Delta

    JV with Delta

    EMIRATES

    CHANGING PARTNERSAn increasing taste for mergers and joint ventures, both inside and outside the major groupings, continues to see the evolution of the alliance worlds

    SRILANKAN AIRLINES

    HEADER: ALLIANCES: SNAPSHOT HEADLINE: CHANGING PARTNERS STANDFIRST:An increasing taste for mergers and joint venture, both inside and outside of the major groupings, continues to see the evolution of the alliance worlds Some small correction on the text boxes next to the circles: ONEWORLDFor Etihad can we change the word-ing to: Equity and codeshare deal with Air BerlinFor TAM can we change the wording to: Leaving Star to join Oneworld through LATAM mergerFor US Airways can we change the wording to: Leaving Star to join One-world through American merger SKYTEAMGO! Should be GOL (there is an airline Go! By the way) and can we change the wording to:Partnership with Delta STAR ALLIANCESVirgin Australia can we change the wording to: partnerships with SIA and ANZ

    VIRGIN AUSTRALIA

    VIRGIN ATLANTIC

    ETIHADUS

    AIRWAYS

    TAM

    VIRGIN AUSTRALIA

    GARUDA INDONESIA

    QATAR AIRWAYS

    GOLETIHAD

    STAR ALLIANCE

    SKYTEAM

    ONEWORLD

    28 MEMBERS

    18 MEMBERS

    12 MEMBERS

  • ightglobal.com/ab ightglobal.com/ab

    gin Atlantic (the Delta-Virgin Atlantic joint venture will be separate from the existing partnership, but all fi ve parties will co-ordi-nate on traffi c fl ows in the market); and United Airlines, Air Canada and Lufthansa.

    Yet these changes are being accepted by the industry.

    Despite these moves by Delta and Virgin, we are confi dent that American and its joint business partners will continue to offer cus-tomers the most attractive products and services and most compelling value propo-sition across the transatlantic [route], says Kurt Stache, vice-president of strategic alli-ances at American.

    American and its joint-venture partners will see their share jump to a little more than 24% from nearly 20% once US Airways is included, based on Flightglobal/Innovatas September ASK data.

    By comparison, Deltas existing joint ven-ture has a 23% share across the North Atlan-tic, according to Flightglobal/Innovata data. While its alliance with Virgin will be separate from that, its two joint ventures together will have more than a 28% share.

    Obviously the [Delta-Virgin Atlantic] deal will strengthen Delta but, when we look at our relative strength across the Atlantic, we feel very good about it, says Star Alliance chief executive Mark Schwab. Star includes the existing Air Canada, Lufthansa and United alliance, which has a market share of nearly 27%, according to Flightglobal/Innovata.

    On the impending departure of US Air-ways Schwab says: We strongly believe that fair competition among alliances strong, high-quality and running sustainable busi-nesses is in the best interest of both global and national economies.

    CAPACITY STASISCapacity across the Atlantic remains rela-tively fl at, with airlines remaining disci-plined, continuing a multi-year trend. Flight-global/Innovata data shows that there are 25.7 million ASKs scheduled in September, which is up by 1.2% compared to 2012 but down by about 1% since 2011.

    Airlines are praising this trend. Weve right-sized our footprint in Europe over the last several quarters, and the improvement in our transatlantic unit revenue results this quarter illustrates the benefi t of capacity dis-

    ALLIANCES SURVEY

    September 2013 | Airline Business | 3332 | Airline Business | September 2013

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    CROSS HEADMelior / NI

    Melior / I

    JOINED-UP THINKINGTransatlantic tie-ups remain disciplined on capacity and have developed through Deltas deal with Virgin, meaning 75% of the lucrative market is within a partnership

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    QUOTE PERSON NAMEQuote person details

    For more on the transatlantic, see our earlier analysis at:fl ightglobal.com/transatlantic12

    REPORTEDWARD RUSSELL WASHINGTON DC

    Fair competition among alliances is in the best

    interest of both global and national economies

    MARK SCHWABChief executive, Star Alliance

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    probably maximum length to be interesting

    QUOTE PERSON NAMEQuote person details

    FIRSTNAME SURNAME LOCATION

    TWO DECK HEADLINE HERE PLEASE

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    CROSS HEAD

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    Xxxxx xxxxx xxxxxxxxx, read our analysis with xxxxxxxx chief executive Xxxxxxx Xxxxxxxxxx fl ightglobal.com/??????????

    REPORTAUTHOR WHERE?

    Delta Air Lines broke with North Atlantic joint-venture conven-tion with its recent acquisition of a 49% stake in Virgin Atlan-tic from Singapore Airlines.

    The move was a precursor to a new immu-nised joint venture between the UK and USA, and Delta hopes an even greater share of the lucrative market.

    This is quite bold and quite new, says Craig Jenks, president of consultancy Air-line/Aviation Projects. In the whole history of North Atlantic alliances and joint ven-tures, this is much bolder than anything else weve seen.

    The deal is the fi rst in which a US carrier has taken a signifi cant equity stake in a Euro-pean carrier, as Delta and Virgin point out in their joint application for antitrust immunity to the US Department of Transportation. It is also the fi rst such transaction that includes a metal-neutral immunised alliance.

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