An airline alliance is a corporate agreement between two or more airlines to achieve the marketing benefits of scope and the cost economies from any synergies, through the networks of those airlines operating in geographically distinct markets, ideally in different continents (Doganis, 20061).
In today’s airline industry, most national flag carriers belong to one of the three global alliances, Star Alliance, SkyTeam and oneworld. The global alliances’ partners in total occupy 60.8 per cent of passengers in the world in 2008 (Wikipedia, 2009 5).
In recent, years, Arab airline companies is planning to launch the fourth global alliance, called Arabesk Airline Alliance, which is still an unofficial and unbinding airline alliance.
Overall Airline Alliance Ranking
1. Star Alliance
|Star Alliance logo (Picture embedded from Academy of International Business on 28 March 2009)|
Fact and figures (Star Alliance (20094)
Member Airlines: 21
Network: 912 airports 159 countries
Annual Passengers: 499, 90 million
Market Share: 29.3%
Company Headquarters: Frankfurt (Germany)
Air Canada, United Airlines, U.S. Airways
Egypt Air, South African Airways
Air China, Shanghai Airlines, All Nippon Airways, Asiana Airlines, Singapore Airlines, Thai Airways, Air New Zealand
bmi, LOT Polish Airlines, Lufthansa, SAS Scandinavian Airlines, Spanair, Swiss International Air Lines, TAP Portugal, Turkish Airlines, Austrian Airlines
Star Alliance features
- Star Alliance has the largest scale of airline alliance among three global alliances, in terms of member airlines and network routes.
- Many Asian airlines joined Star Alliance; therefore, it provides significant convenience for Asian travelers to travel Europe and America.
- Strong African network by Egypt Air and South African Airways.
- Star Alliance has only a Canadian airline among global alliance.
- As a result of TAM (Brazil) joined the alliance, Star Alliance’s network covers all continents in the world.
- Difficult and complex to manage all members.
- May lose the benefits if two or more member airlines operate in the same route, and they may be likely to compete each other between member airlines.
Promotion Video - Star Alliance
|Video embedded from YouTube on 28 Mar 2009|
|SkyTeam logo and members' logos (Picture embedded from Northwest Airlines on 28 March 2009)|
Fact and figures //(SkyTeam, 20093)
Member Airlines: 11
Network: 905 airports 169 countries
Annual Passengers; 462 million
Market Share: 20.6%
Aeromexico, Continental Airlines, Delta Air Lines, Northwest Airlines
(Asia / Pacific -2)
Korean Air, China Southern Airlines
Aeroflot, Air France, Alitalia, CSA Czech Airlines, KLM Royal Dutch Airlines.
(Associate Members -3)
Kenya Airways, Air Europa, Copa Airlines
- SkyTeam has the largest number of airline members in North America among three global alliances (Wikipedia, 2009 7).
- SkyTeam earned the most revenue passenger kilometers (RPK) in North America and Europe.
- The largest Airline Cargo Alliance is functioning between member airlines.
- Most airline members provide unlimited miles services in Frequent Flyer Programs.
- Only two members from Asia
- None of member airlines from Oceania or Middle East, SkyTeam provides very weak route network in these areas.
|Oneworld logo (Picture embedded from Holiday Extras on 28 March 2009)|
Fact and Figures (Oneworld, 20092)
Member Airlines: 10
Network: 673 airports 134 countries
Annual Passengers; 328, 62 million
Market Share: 23.2%
Company Headquarters: Vancouver (Canada)
American Airlines, LAN
Cathay Pacific, Japan Airlines, Qantas, Royal Jordanian,
British Airways, Finnair, Iberia, Malev
- Apart from Africa, oneworld operates flights in most continents.
- After JAL joined oneworld, the alliance gained the extensive network in East Asia.
- Strong Middle East Network by Royal Jordanian Airlines and British Airways.
- oneworld won six consecutive years of the Best Airline Alliance Award in World Travel Award until 2008 (Wikipedia, 2009 8).
- None of airline member from South-East Asia
(9 Middle East airlines)
Ethihad Airways, Egypt Air, Gulf Air, Middle East Airlines, Royal Jordanian, Saudi Arabian Airlines, Syrian Arab Airlines, Tunisair, Yemenia
(Referred from Wikipedia (2009)6.)
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Since the start of Star Alliance since 1997, the formation of two other airline alliance came in to place, which are Oneworld and Skyteam. Untill 2009, the three airline alliance have achieved to sell more than half of the total amount of sky travellers tickets, and the annual passenger amount even reached more than 2/3, which is beyond the predition made by many experts around the world.
The purpose of forming an alliance between the airlines intially is to strengthen the competitive by sharing the hardware and networks between airlines. this includes code sharing the flights, sharing in points collections and as well as the hardware in the airport and the promoting in mamgement, are all to be shared.
But to become a member within the alliance, is not just only the identity and the cooperation in business, but also to have the image that will not pull down the other alliance. For example, it is impossible for low cost carriers to join the alliance. It is because they have weak image, less network and poor service onborad. Alliance will have to control their quality by setting a higher mark for all the airlines that wishes to join the alliance.