| Journal: TWUK | Section: |
| Title: | Issue Date: 28/08/00 |
| Author: | Page Number: 8 |
| Copyright: Other |
Analysis
Will alliance success see airline brands grounded?
With joint frequent-flyer schemes and plans to build dedicated terminals, airline alliances are gaining ground. But will this lead to members losing their identities? Louise Longman reports
UNLESS you’re a frequent business traveller you would be forgiven for thinking that Qualiflyer was a type of vegetable and Skyteam a free-fall parachute club.But to those in the know, these are just two of the five airline alliances which are growing in size and status.
Qualiflyer, Skyteam, Oneworld, Star Alliance and Wings were all formed to give members as much access to global routes as possible.
But they are now taking further steps to make their product more attractive to customers.
Take Star Alliance – with 13 members in total and 15 airlines, it is the largest of the five alliance groups, and apart from a presence in Africa or China, it seems to have reached its limit. The next focus will be on the customer.
As exclusively revealed in Travel Weekly (July 24), Star Alliance will launch its first frequent-flyer programme next month. Expected to be called Mixed Rewards, it will allow passengers travelling on any of the partner airlines to collect and redeem miles.
Joint check-in desks for the nine Star airlines using Heathrow were introduced last month and joint Star Alliance passenger lounges are appearing at airports worldwide.
Another idea in the Star’s pipeline is to open a branded terminal in the UK.
British Midland chief executive officer Austin Reid said: “Our role in combining activities at Heathrow is very important. That could mean Star Alliance has a terminal there.”
Star Alliance’s UK spokesman and Air Canada general manager passenger sales for UK and the Netherlands Bob Atkinson said: “There is a Star Alliance terminal in Rio de Janeiro and in Hong Kong. We are looking to see how we can consolidate the infrastructure at Heathrow to create a stronger brand for Star.”
British Airways’ agreement with BAA to build the long-awaited Terminal 5 at Heathrow is another move that will undoubtedly free up space for alliance-branded terminals or areas within the airport.
A BAspokesman said: “BA and its Oneworld partners do have first shout as far as Heathrow’s Terminal 5 is concerned but details have not yet been specified.”
So if Star Alliance and Oneworld are jostling for first position in the UK, where does that leave the others?
Skyteam is the most recent alliance following its launch last year with founding members Delta and Air France.
Despite only having four member airlines, Skyteam claims it covers 80% of worldwide travel and, like Qualiflyer, sings the ‘big isn’t best’ mantra.
The Qualiflyer group, which boasts the Swissair/Sabena Group, TAP Air Portugal and French airline AOM among its members, says its European position and its anti-trust agreements between its airlines are points of difference.
But with increasing alliance members, some fear we could see the day when the alliance brand is more important than the kudos of flying on, say, BA or Virgin Atlantic.
“I certainly hope alliances will not become more important than individual members,” said one industry insider. “If that’s the case, we may as well fly on a plain white aircraft with no branding.”
Advantage Travel Centre business development director Norman Gage said: “The alliances sound great in principle -Êbut they have a long way to go to provide seamless travel.
“Sometimes it can get a bit confusing when you see a BA flight change to Finnair. And when Virgin pulled its Orlando service from Manchester, there was a huge uproar due to the perception that no-one can do the service like Virgin.”
Gage’s concerns are backed by Delta director of sales Steve Smith who foresees the use of alliance-branded aircraft to save passenger confusion.
“As long as governments own airlines, they will not give up their national brand. But once airlines get full ownership, then alliances could have one big brand. In four to five years’ time you might see major networks in the sky, rather than individual airlines,” said Smith.
quotes
“Passengers tell us they like the Star Alliance brand but they also like the national style of individual carriers. So we must retain each member’s characteristics.”
Bob Atkinson, UK spokesman, Star Alliance
“The more airlines you have in an alliance, then the more difficult it is to have an alliance-only terminal.”
Steve Smith, director of sales, Delta
“People say there will be three main alliances but there will always be niche markets and niche carriers.”
Kirk Albrow, general manager UK and Ireland, Swissair/Sabena
Gage:alliances are great in principle
Who’s in which alliance
Star Alliance: Air Canada, Air New Zealand, ANA, Ansett Australia, Austrian Airlines, British Midland, Lauda Air, Lufthansa, Mexicana, Scandinavian Airlines, Singapore Airlines, Thai, Tyrolean, United Airlines, Varig.