Do we finally have a fourth global airline alliance? Only in an embryonic state. This will take a little background and explanation to make sense.
Over the last 15-20 years, many of the world’s major airlines have partnered into three global airline alliances: Oneworld, SkyTeam and Star Alliance. The purpose of these is simple: an airline, such as American, can sell a ticket to Athens (where it doesn’t fly) by including the London-Athens segment on its partner British Airways. This expands sales opportunities for airlines, smoothes multi-airline service for customers, and allows travelers to earn and redeem frequent flyer miles far beyond the airline they bank them with.
The last decade has seen the rapid rise of a new set of airlines from the Middle East, the largest of which are Emirates, Etihad and Qatar Airways. Qatar Airways joined Oneworld last year, but the other two (among second-tier carriers like Gulf Air) have been stubbornly independent, refusing to join any alliance. They have made bi-lateral partnerships with other carriers; Emirates and Alaska Airlines are partners, for instance. But these are small ball – a little like two countries signing a bi-lateral free trade deal instead of joining the WTO.
I’ve long suspected that either Emirates or Etihad – the two biggest and most important players in the Middle Eastern market – would start a fourth alliance. Etihad’s announcement somewhat fulfills that idea, though it’s a long way from competing on par with the big three alliances. Etihad has even disclaimed the word “alliance” in favor of “like minded partners.”
Here’s the initial member list of this new, non-alliance:
- Air Serbia
- Air Seychelles
- Darwin Airline
- Jet Airways
Not exactly the “A Team” of the modern airline industry, so this venture has a ways to go before being globally competitive. The most interesting aspect so far is that Airberlin is already part of the Oneworld alliance, and Etihad is just fine with that. Depending on how the frequent flyer mileage redemption rates work out, this might make Airberlin’s program more attractive, giving it access both to all the Oneworld partners in addition to Etihad’s non-alliance alliance.
The 800 pound gorilla in the room is still Emirates, though. How long will they remain independent? Emirates, the Virgin Group airlines and one or two poached from existing alliances certainly could shake things up.