Published in Air Transport News on January 2012.

ALLIANCES OF THE ……. SKIES,

DOMINATION OR DILEMMA?

The circumstances that prompted the Airlines worldwide to participate in successive cycles of alliances are substantial and important.

Especially because of the current critical economic situation, which sways dangerously any kind of company on our Planet, the causes not only for mergers of companies but as well of their “grouping” have been imposed objectively.

The leading figure today in numbers but also in routes’ volume is certainly STAR Alliance, since its departures rise to 21.000 daily.

It consists of 28 members, (total fleet: 4.023 aircraft), among which prominent are AIR CANADA, United, Singapore, THAI, Lufthansa, Turkish Airlines, AIR CHINA, but also of their dependent subsidiaries.

Currently the war takes place in Latin America where STAR, fighting with ONEWORLD, the second most important of the three totally major alliances, tries hard to attract to its group the South – American emerging giant, which will soon come from the Chilean LAN and the Brazilian ΤΑΜ, named as ¨LATAM¨.

At the time being, each one of them belongs to a separate alliance. But they must choose the soonest possible the same team.

We believe that STAR Alliance, will prove the winner of this “Star Trek” war, because the major partners of ONEWORLD, which are Iberia, and British Airways, have a network that competes with the network of LATAM.

Therefore the further geopolitical development of LATAM, dictates this evolution.

Unless the criterion of ¨sharecode¨ alliance dominates, as being the strongest in our times, especially regarding the labor cost and the ever rising oil prices.

Then ONEWORLD will be the winner.

Great of course is the battle for the Chinese partners and the Japanese or the Indian giants of the skies.

Of course SKY Team, being the third player globally, while KLM and KOREAN AIR lead, drastically improves its position today.

On the top China Southern και China Eastern, gave to “SKY Team” a dynamic upward and competitive course.

Nevertheless, the crucial point that will reconfigure the position of each alliance, is their effective ability to share, among other things, profits by joint check-in, at the airports worldwide.

For the passenger, of course, “share code” has small advantages.

Good prices emerge, if you have time and patience to change plane at the ¨stop overs¨.

Why not to travel with L.C.C., (Low Cost Carriers), especially when traveling at the same Continent, which certainly have much cheaper fare? And when your criterion is not the comfortable ¨ pitch¨;

Now those airlines that have remained globally independent without entering any alliance, how do they plan to compete?

The most of them which are remarkable, consider always the possibility of their integration such as AIR-INDIA, without counting R. Branson and other private Indian operators who consider positive the alliances.

On the other side, the new long-haul aircraft, particularly the AIRBUS-A380, that can reach up to 800 seats in ¨Υ¨ configuration, will minimize extremely the costs and will soon challenge practically the effectiveness of the alliances at a critical level.

Mainly in Trans Atlantic and/or Intercontinental routes.

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