Airline Alliances

An airline alliance is an aviation industry arrangement between two or more airlines agreeing to cooperate on a substantial level. Alliances may provide marketing branding to facilitate travelers making inter-airline codeshare connections within countries. This branding may involve unified aircraft liveries of member aircraft. In 2015, Star Alliance was the largest with 23% of total scheduled traffic in revenue passenger miles (RPMs)/revenue passenger kilometres (RPKs), followed by SkyTeam with 20.4% and Oneworld with 17.8%, leaving 38.8% for others.

History

The first airline alliance was formed in the 1930s, when Panair do Brasil and its parent company Pan American World Airways agreed to exchange routes to Latin America. In 1990, the African Joint Air Services (AJAS) Accord between Tanzania, Uganda and Zambia led to the launch of Alliance Air in 1994 with South African Airways, Air Tanzania, Uganda Airlines and the governments of Uganda and Tanzania as shareholders.

The first large alliance began in 1989, when Northwest Airlines and KLM agreed to large-scale codesharing. In 1992, the Netherlands signed the first open skies agreement with the United States, in spite of objections from the European Union, which gave both countries unrestricted landing rights on the other's soil. Normally landing rights are granted for a fixed number of flights per week to a fixed destination. Each adjustment requires negotiations, often between governments rather than between the companies involved. In return, the United States granted antitrust immunity to the alliance between Northwest Airlines and KLM. Other alliances would struggle for years to overcome the transnational barriers and lack of antitrust immunity, and still do so.

The Star Alliance was founded in 1997, which brought competing airlines to form Oneworld in 1999 and SkyTeam in 2000.

In 2010 Richard Branson, chairman of the Virgin Group, announced his intention to form a fourth alliance among Virgin branded airlines (Virgin Atlantic; Virgin America; and the Virgin Australia Holdings group of airlines). Then in September 2011, Branson said that Virgin would join one of the existing alliances; this idea was repeated in October 2012. In December 2012, Delta Air Lines purchased Singapore Airlines' 49% stake in Virgin Atlantic for £224 million.

On February 14, 2013, it was announced that American Airlines and US Airways would merge, retaining the American Airlines name and would remain in the Oneworld alliance. US Airways participation in the Star Alliance lapsed. In 2012, in South America, LAN Airlines and TAM Airlines began their merger. In March 2014, with the merger complete, TAM left Star Alliance and became part of LAN in Oneworld.

On September 21, 2015, the Vanilla Alliance was formed between several airlines based in the Indian Ocean region, in order to improve air connectivity within the region. The founding members are Air Austral, Air Mauritius, Air Madagascar, Air Seychelles, and Int'Air Îles.

On January 18, 2016, the first alliance of low-cost carriers was formed, U-FLY Alliance. The founding members—HK Express, Lucky Air, Urumqi Air, and West Air—are all affiliated with HNA Group, although the alliance is also seeking airlines not within the group.

On May 16, 2016, the world's largest alliance of low-cost carriers was formed, Value Alliance. The founding members are Cebu Pacific, Cebgo, Jeju Air, Nok Air, NokScoot, Scoot Airlines, Tigerair, Tigerair Australia, and Vanilla Air.

Rationale

Benefits can consist of:

• An extended network, often realised through codeshare agreements. Many alliances started as only codeshare networks.
• Cost reduction from sharing of:
  • sales offices
  • maintenance facilities
  • operational facilities, e.g. catering or computer systems.
  • operational staff, e.g. ground handling personnel, at check-in and boarding desks.
  • investments and purchases, e.g. in order to negotiate extra volume discounts.
• Traveler benefits can include:
  • lower prices due to lowered operational costs for a given route.
  • more departure times to choose from on a given route.
  • more destinations within easy reach.
  • shorter travel times as a result of optimised transfers.
  • a wider range of airport lounges shared with alliance members
  • fast track access on all alliance members if having frequent flyer status
  • faster mileage rewards by earning miles for a single account on several different carriers.
  • round-the-world tickets, enabling travelers to fly over the world for a relatively low price.

Airline alliances may also create disadvantages for the traveler, such as:

• Higher prices when competition is erased on a certain route.
• Less frequent flights: for instance, if two airlines separately fly three and two times a day respectively on a shared route, their alliance might fly less than 5 (3+2) times a day on the same route. This might be especially true between hub cities for each airline. e.g., flights between Detroit Metropolitan Wayne County Airport (a Delta Air Lines fortress hub) and Amsterdam Airport Schiphol (a KLM fortress hub).

Star Alliance

Star Alliance is one of the world's largest global airline alliances. Founded on 14 May 1997, its current CEO is Jeffrey Goh and its headquarters is located in Frankfurt am Main, Germany. As of November 2016, Star Alliance is the largest global alliance by passenger count with 689.98 million, ahead of SkyTeam (665.4 million) and Oneworld (557.4 million). Its slogan is "The Way The Earth Connects".

Star Alliance's 27 member airlines operate a fleet of approximately 4,657 aircraft, serve more than 1,330 airports in 192 countries and carry 641.1 million passengers per year on more than 18,500 daily departures. The alliance has a two-tier rewards program, Silver and Gold, with incentives including priority boarding and upgrades. Like other airline alliances, Star Alliance airlines share airport terminals (known as co-location) and many member planes are painted in the alliance's livery.

Members and affiliates

Member	Joined	Fleet size	Affiliates
Adria Airways	18 November 2004	13	N/A
Aegean Airlines	30 June 2010	46	Olympic Air
Air Canada	14 May 1997	403	Air Canada Express  Air Canada Rouge
Air China	12 December 2007	392	Dalian Airlines
Air India	3 July 2014	132	Alliance Air
Air New Zealand	3 May 1999	103	Air New Zealand Link
All Nippon Airways	15 October 1999	218	Air Japan  ANA Wings
Asiana Airlines	28 March 2003	69	Air Seoul  Air Busan
Austrian Airlines	26 March 2000	82	N/A
Avianca	21 June 2012	173	Avianca Argentina  Avianca Brazil  Avianca Costa Rica  Avianca Ecuador  Avianca El Salvador  Avianca Guatemala  Avianca Honduras  Avianca Peru
Brussels Airlines	9 December 2009	44	N/A
Copa Airlines	21 June 2012	74	Copa Airlines Colombia
Croatia Airlines	18 November 2004	14	N/A
EgyptAir	11 July 2008	50	EgyptAir Express
Ethiopian Airlines	13 December 2011	96	N/A
EVA Air	18 June 2013	74	UNI Air
LOT Polish Airlines	26 October 2003	59	LOT Charters  Nordica Airlines
Lufthansa	14 May 1997	273	Lufthansa Regional  Lufthansa CityLine  Air Dolomiti  SunExpress Deutschland
Scandinavian Airlines	14 May 1997	159	Scandinavian Airlines Ireland
Shenzhen Airlines	29 November 2012	176	Kunming Airlines
Singapore Airlines	1 April 2000	112	Silkair
South African Airways	10 April 2006	55	Airlink  South African Express  Mango
Swiss International Air Lines	1 April 2006	78	Edelweiss Air
TAP Air Portugal	14 March 2005	90	TAP Express
Thai Airways	14 May 1997	83	Thai Smile
Turkish Airlines	1 April 2008	325	AnadoluJet  SunExpress
United Airlines	14 May 1997	742	United Express

SkyTeam Alliance

SkyTeam is an airline alliance. Founded in June 2000, SkyTeam was the last of the three major airline alliances to be formed, the first two being Star Alliance and Oneworld. As of March 2014, SkyTeam consists of 20 carriers from five continents and operates with the slogan "Caring more about you". It also operates a cargo alliance named SkyTeam Cargo, which partners ten carriers, all of them SkyTeam members. Its centralised management team, SkyTeam Central, is based at the World Trade Center Schiphol Airport on the grounds of Amsterdam Airport Schiphol in Haarlemmermeer, Netherlands.

In 2004, the alliance had its biggest expansion when Continental Airlines, Northwest Airlines and KLM simultaneously joined as full members. In 2010, the alliance celebrated its 10th anniversary with the introduction of a special livery, the joining or upgrading status of four airlines, followed by the announcements of Aerolíneas Argentinas, China Airlines, and Garuda Indonesia to become full members. In January 2011, incorporated both Saudi Arabian Airlines and Middle East Airlines during 2012; these events effectively took place in May and June 2012, respectively, whereas Aerolíneas Argentinas and Xiamen Airlines memberships were activated in August and November the same year, respectively. Garuda Indonesia entered the alliance in March 2014.

As of March 2014, SkyTeam flies to more than 1,000 destinations in 178 countries and operates some 15,700 daily flights with a combined fleet of over 4,400 aircraft, including associate carriers. The alliance and its members have a total workforce of 459,781; furthermore, it has 564 lounges worldwide to serve 588 million annual passengers.

Premium status

SkyTeam has two premium levels, Elite and Elite Plus, based on a customer's tier status in a member carrier's frequent-flyer program. Each of the member and associate airlines recognises the elite statuses, with a few exceptions. The statuses have no specific requirements of their own; membership is based solely on the frequent-flyer programs of individual member airlines.

SkyTeam Elite

SkyTeam Elite status is awarded to customers who have reached a premium level of a member carrier's frequent flyer program. Benefits of SkyTeam Elite membership:

• Priority reservations waitlisting
• Priority airport standby
• Priority boarding
• Priority check-in
• Preferred seating

SkyTeam Elite Plus

SkyTeam Elite Plus status is awarded to customers who have reached a higher premium level of a member carrier's frequent flyer program. Benefits of SkyTeam Elite Plus membership:

• Priority reservations waitlisting
• Priority airport standby
• Priority boarding
• Priority airport check-in
• Preferred seating
• Priority baggage handling
• Additional checked luggage allowance
• Airport lounge access
• Guaranteed reservations on sold-out flights
• Express airport security (in some hub airports)

Full members and their member affiliates

Member airline	Joined	Member affiliates
Aeroflot	14 April 2006	N/A
Aerolíneas Argentinas	29 August 2012	Austral Líneas Aéreas
Aeroméxico	22 June 2000	Aeroméxico Connect
Air Europa	4 September 2007	N/A
Air France	22 June 2000	N/A
Alitalia	13 January 2009	Alitalia CityLiner
China Airlines	28 September 2011	Mandarin Airlines
China Eastern Airlines	21 June 2011	Shanghai Airlines
China Southern Airlines	15 November 2007	N/A
Czech Airlines	25 March 2001	N/A
Delta Air Lines	22 June 2000	Delta Connection
		Delta Shuttle
Garuda Indonesia	5 March 2014	N/A
Kenya Airways	4 September 2007	N/A
KLM	13 September 2004	KLM Cityhopper
Korean Air	22 June 2000	N/A
Middle East Airlines	28 June 2012	N/A
Saudia	29 May 2012	N/A
TAROM	25 June 2010	N/A
Vietnam Airlines	10 June 2010	N/A
Xiamen Airlines	21 November 2012	N/A

Oneworld Alliance

Oneworld is an airline alliance founded on February 1, 1999. The alliance's stated objective is to be the first-choice airline alliance for the world's frequent international travelers. Its central alliance office is in Manhattan, New York, United States. Its member airlines include American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LATAM Airlines, Malaysia Airlines, Qantas, Qatar Airways, Royal Jordanian, S7 Airlines and SriLankan Airlines, plus some 30 affiliated airlines. As of October 2017, Oneworld is the third-largest global alliance in terms of passengers with more than 527.9 million passengers carried, behind Star Alliance (689.98 M) and SkyTeam (665.4 M). Its slogan is "An alliance of the world's leading airlines working as one."

As of October 2017, its member airlines collectively operate a fleet of 3,447 aircraft, serve about 1,000 airports in more than 158 countries, carrying 527.9 million passengers per year on 12,738 daily departures, generating annual revenues of more than US$130 billion.

Premium status

Oneworld has three premium status levels—Ruby, Sapphire, and Emerald—based on the customer's tier status in the member airline's frequent-flyer program. Emerald status is the highest level in each member's programme, and all of the statuses are recognised by each of the member airlines. The premium statuses have no specific requirements of their own; membership is based solely on the frequent-flyer programs of the individual member airline. Alliance benefits are only available to passengers on scheduled flights that are both operated and marketed by a member airline.

Full members and their affiliates

Member airline	Joined	Fleet size	Member affiliates
American Airlines	1 February 1999	956	American Eagle  American Airlines Shuttle
British Airways	1 February 1999	273	BA CityFlyer  Comair  OpenSkies  Sun-Air
Cathay Pacific	1 February 1999	148	Cathay Dragon
Finnair	1 September 1999	79	Nordic Regional Airlines
Iberia	1 September 1999	79	Iberia Regional  Iberia Express
Japan Airlines	1 April 2007	162	J-Air  Japan Transocean Air
LATAM	1 June 2000 31 March 2014	353	LATAM Argentina  LATAM Brasil  LATAM Colombia  LATAM Chile  LATAM Ecuador  LATAM Express  LATAM Perú
Malaysia Airlines	1 February 2013	72	Firefly  MASWings
Qantas	1 February 1999	124	Jetconnect  QantasLink
Qatar Airways	30 October 2013	206	N/A
Royal Jordanian	1 April 2007	26	N/A
S7 Airlines	15 November 2010	81	Globus Airlines
SriLankan Airlines	1 May 2014	26	N/A