The Story of Airline Alliances

Most likely, you’ve heard that airline alliances make traveling across countries and continents easy. From a commuter’s standpoint, the ease of travel is still improving despite the problems presented by 9/11. From the airliner and business point of view, there are still ways to improve business and profitability. One way to go about reaching business and profit projections is to enter into an airline alliance. An airline alliance is an agreement among air carriers on many common issues and concerns. These alliances work to allow US air carriers to travel across countries and continents to a partner airline’s hub and priviliges, allowing alliance passengers to transfer to partner flights as connecting flights. Currently, the three largest alliances in use today are Star Alliance, Sky Team and Oneworld Alliance.

Reasons for Alliances

Entering into an airline alliance is a win-win situation for airlines. Here are some of the reasons why being part of an airline alliance is one of the most profitable decisions that an airliner can make.

• The airlines enjoy an extensive and optimized network among themselves, including codesharing, which allows others to share priviliges among member airlines.
• An effective overhead cost reduction occurs for the airline, as each alliance member can share information for booking and reservation purposes.

The airline alliance also provides travelers with the following benefits:

• Price discounts as a result of lowered route operational costs
• More choices for departure times on a given route
• More destinations
• Optimized travel time from facilitated transfers
• Broader airport lounge options
• Increased earning capacity for flyer miles
• Lower around-the-world ticket prices

Airline Alliances Memberships

Three major airline alliances operate in the industry. They are Star Alliance, Sky Team Alliance and Oneworld Alliance, and their member airlines are as follows.

Star Alliance

• Air Canada – Canada’s largest full service airline and the largest provider of scheduled passenger services in Canada.
• Air China – The only airline company servicing China and other stops that carry the flag of the People’s Republic of China.
• Air New Zealand – New Zealand’s national airline serving 52 cities in 15 countries, with 26 destinations within the country.
• All Nippon Airways – One of Japan’s private airlines that serves 77 destinations in 11 countries.
• Asiana Airlines – This is the second flag carrier of South Korea, serving 82 cities in 20 countries and 12 destinations within its country.
• Austrian Airlines – The leading carrier in Central, Eastern Europe and the Middle East.
• BMI – The second largest airline company at Heathrow Airport in London, with services in the United Kingdom, Europe, the Middle East, Central Asia and Northern Africa.
• EgyptAir – Egypt’s flag carrier with 69 destinations in 44 countries and over 1200 weekly flights.
• LOT Polish Airlines – This is one of the oldest airlines in Europe, and is currently one of the most modern airlines in Europe, carrying many passengers to major hubs in Europe and North America.
• Lufthansa – Headquartered in Cologne, Germany, the service flies to 208 destinations.
• Scandinavian Airlines - A consortium of the national airlines in Denmark, Norway and Sweden offering 822 flights to Europe.
• Shanghai Airlines – The airline has a fleet of 66 aircraft with a 170 domestic and 13 international and regional destinations.
• Singapore Airlines – Throughout its long history, this airline has become one of the most innovative service carriers to 65 destinations in 35 countries.
• South African Airways – As one of the oldest airlines in the world, it offers travel to 20 destinations across Africa, including its hub in South Africa.
• SpanAir – The Spanish flag carrier offers 250 daily flights with a fleet 48 aircraft covering intercontinental flights to Madrid-Washington-Dallas, Sao Paulo, Rio de Janeiro, Buenos Aires and Havana.
• Swiss International Air Lines – Swiss quality service has been a mark of the Swiss national airline, traveling to 90 destinations from its Zurich hub, Basel and Geneva international airports.
• TAP Portugal – The leading Portuguese airline with Lisbon as its hub, traveling to 59 domestic and international destinations in 26 countries throughout the world.
• Thai Airways International – With Bangkok as its hub, this is Asia’s leading airline with 74 destinations in 35 countries worldwide.
• Turkish Airlines – Turkey’s national flag carrier and one of the fastest growing in the world, servicing 112 international and 36 domestic destinations.
• United Airlines – One of the United States’ foremost airlines, servicing 200 domestic and international destinations.
• US Airways – One of the greatest successes in the airline industry from its airmail delivery origins, with 3,800 daily departures to 240 destinations to 32 countries.

Sky Team Alliance

• Aeroflot – The largest Russian airline operating 302 flights a day to 94 destinations in 47 countries.
• AeroMexico – The Caballero Aguila is one of the biggest airlines with offerings of daily flights to North, Central and South America, and Europe and Asia.
• Air France – This French flag carrier operates 1,862 flights, most of which are nonstop to 258 destinations in 110 countries.
• Alitalia – The Italian flagship covers 89 destinations in 44 countries, with 665 flights daily.
• China Southern Airlines – China’s largest airline with a large domestic and international service.
• Continental Airlines – The world’s fifth largest airlines with 289 destinations for its 3,500 daily departures.
• CSA Czech Airlines – The airline is one of the most convenient airlines servicing Western and Eastern Europe.
• Delta Airlines – This US airline service covers 321 destinations in 64 countries, with 37 transatlantic markers.
• KLM Royal Dutch Airlines – This is Europe’s leading airline with a total of 258 destinations worldwide either nonstop or through another airport.
• Korean Air – This airline has services to over 115 destinations in over 38 countries.
• Northwest Airlines – This large US airline service has at least 2,655 daily departures with 905 destination cities in 169 countries in six continents.
• Air Europa – This is a local airline in the Spanish territory with 44 destinations in 15 countries.
• Copa Airlines – Its hub is Panama, with 41 destinations serving 22 countries.
• Kenya Airways – The airline of choice in Africa, with 42 destinations in 34 countries.

Oneworld Alliance

• American Airlines – The biggest airline in the world leading to over 250 destinations worldwide.
• British Airways – Based in London Heathrow with 175 destinations in 80 countries.
• Cathay Pacific – One of the premium carriers in Asia with destinations to 115 hubs in 36 countries.
• Finnair – Finland’s air carrier, reaching 60 destinations in 30 countries worldwide.
• Iberia Air – This Spanish flag carrier offers flights to 105 cities in over 40 countries.
• Japan Airlines – The largest airline in the Asia Pacific Region with operations in 90 destinations in 25 countries.
• LAN Alliance – The merged service for Ecuador, Argentina, Chile and Peru, which serves 60 destinations in 20 countries in Latin America and the world.
• Malev – The Hungarian flag carrier serves 50 destinations in 37 countries throughout Europe.
• Qantas – The Australian airline and covers 85 destinations in 40 countries through its long distance carrier service.
• Royal Jordanian – The national carrier of Jordan and one of the best services in the Middle East, with 50 destinations in 30 countries worldwide.

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Frequent Flyer Mileage Points

International air travel is the gold standard of mileage points. While most of us think of “Frequent flyer Miles” as a reward for frequent domestic travel, you can really rack up the mileage points during those round trips to China, Thailand, or Japan. In fact, a close look at most airline policies shows that they don’t have “frequent flyer programs”, they have “mileage programs”, or “air bonus programs”.

Many airlines have changed their restrictions on the use and the method of earning frequent flyer mileage points. If you are an old pro at using frequent flyer mileage, log on to your favorite airline’s website and be sure to check out the latest in their rules and regulations. The rules may have changed. A large percentage of frequent flyer points never get redeemed, largely because of the confusion over the rules, and the restrictions on flight times. If you want to get a free flight, you’ll have to be flexible—chances are, you won’t be able to fly at peak times. Besides blackout dates being applied to frequent flyer purchases, many airlines also restrict the number of seats on each plane that can be bought with the bonus points. As a result, if more than a few other people with large stashes of points have the same travel plans as you, then you need to beat them to the punch before the airline shuts the door on you.

You can still find deals, and frequent flyer mileage still gets you rewards, but you may have to work harder for the benefits and be more careful not to blow it by waiting too long to redeem your frequent flyer points or rewards.
Many airlines for example, have begun to implement expiration policies, which may take away all those miles if you haven’t had any activity in a certain period of time. Although the expiration policy varies, it is common for points to expire in 18 or 24 months.

Credit card companies may offer the easiest way to stash miles for frequent flyer travel rewards. Even if you’re not planning a trip, you can bankroll mileage points simply by applying for and using specific credit cards. These credit card mileage deals are not sponsored directly by airlines, but are offered as benefits from the credit card companies themselves. Special organizations that sponsor credit cards may also promote mileage benefits. Be aware though, that those credit card bonuses only look free—credit cards that include special benefits and rewards often carry a higher rate of interest. If you’re looking for the best interest rate on a credit card, you won’t get the extras—but if you carry a low balance and pay it off regularly, the interest rate is of less consequence, and this can be a good way to get extra frequent flyer points.

Today, there are many sources for getting mileage points. By shopping around you can be a savvy flyer and accumulate air mileage points and bonuses that cut the cost of tickets, offer free or reduced flight deals to faraway places, and make the best use of mileage points already earned.

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American Airlines to lay off 175 pilots, possibly more

american-airlines-tailAmerican Airlines will lay off 175 pilots and could furlough more, the airliner confirmed.

In a prepared statement, American said, "The impact of the economy and reduction in capacity over the last 18 months, coupled with lower than expected pilot attrition, has resulted in a pilot surplus. This was a painful but necessary decision, as this staffing adjustment will better align the size of our pilot organization with the size of our current operation."

The furloughs will take place in two parts and will start with the layoff of around 80 pilots in March. The Allied Pilots Association, which represents about 11,000 American Airlines pilots, said the furlough will impact the least-senior pilots first, however, more senior pilots might choose to take a voluntary leave of absence, which would prevent junior pilots from being furloughed.

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British Airways, Iberia and American work on antitrust dispute with the EU

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British Airways and American have tried twice in the past decade to combine efforts, but the EU would only grant them permission if they agreed to give up slots at Heathrow, and the deal never came to fruition. Now, joined by Iberia, they’re trying again.

The EU doesn’t want these three airlines to stifle competition for airline tickets, and would like them to reassess their schedules and surrender some take-off and landing slots in order to even the playing field with other alliances. If the two parties can agree on the proposal, the airlines will be able to avoid cartel fine, which can amount to 10 percent of global revenue.

Right now, the airlines coordinate how they sell and operate flights between Europe and the United States, and they want to expand their alliance to manage capacity and pricing as well, for flights to Canada, Mexico, Puerto Rico, Norway, and Switzerland, according to USA Today.

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