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When Will All Star Alliance Airlines Merge?  
User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Posted (10 years 2 months 1 day 7 hours ago) and read 4329 times:

Surely all of the Star Alliance airlines, One World and other alliance airlines will eventually merge? Is it a regulatory issue preventing it or the will of the airlines/country's to lose their flag carrier or control? If you look at Star Alliance for example and their albino colouring, they are already building the brand and re-painting their aircraft, so is just one of the many steps to help people accept losing their airline losing their colours?

21 replies: All unread, jump to last
 
User currently offlineDABZF From Germany, joined Mar 2004, 1200 posts, RR: 0
Reply 1, posted (10 years 2 months 1 day 4 hours ago) and read 4271 times:

I highly doubt that this will never happen! Sure there might be some mergers within alliance but I don't think that a whole alliance will ever merge into one airline. Regulatory issue is of course one part preventing this but I think even bigger is that most of the airlines still have a high flag carrier image and are even owned by governments who tend to (for what ever reason) keep tight grip of their airlines!

Personally I would hate to see my homeland carrier Finnair (though not being the biggest AY fan) to be dissolved into OneWorld airline!  Crying



I like driving backwards in the fog cause it doesn't remind me of anything - Chris Cornell
User currently offlineGman94 From United Kingdom, joined May 2004, 1239 posts, RR: 0
Reply 2, posted (10 years 2 months 1 day 4 hours ago) and read 4242 times:

The day British Airways becomes One World Airlines is the day I'll stop flying.


British Airways - The Way To Fly
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3289 posts, RR: 4
Reply 3, posted (10 years 2 months 1 day 3 hours ago) and read 4195 times:

"Surely all of the Star Alliance airlines, One World and other alliance airlines will eventually merge?"

As others have said, there are far too many national and regulatory concerns to allow international mergers. It doesn't make any sense to prevent them from doing so, but the rules still exist.

And don't call it Shirley....  Big grin


User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 4, posted (10 years 2 months 1 day 3 hours ago) and read 4178 times:

I don't want to see BA or AA become One World either, but give it 10 years and I can see it happenning. There has been so much de-regulation and think how much economies of scale could be gained - One World would need one CFO/Finance Director rather than the 10 or so currently in the airlines, fleet standardisation etc...I think the governments would rather see profitable airlines than constantly have to bail them out as so many have had to do in the US (with so many!), Alitalia etc etc...I bet you all big dough that within ten years they will have consolidated into one...look at BMI for example, already partly owned by SAS and Lufthansa...

User currently offlineStarCruiser From United States of America, joined May 2004, 301 posts, RR: 0
Reply 5, posted (10 years 2 months 1 day 3 hours ago) and read 4176 times:

I suspect we will see four airlines in the not too distant future. They will be One World, Star, SkyTeam and a yet to be determined airline made up of the leftovers called SlumAir, which will fly NW's (now SkyTeam's) recently retired DC-9s. Since SlumAir will be a deeply discounted LCC (sans peanuts), seats will be eliminated, and passengers will be belted to the two floors allowing the mighty DC-9s to carry twice the number of passengers. All the rest of the airlines will fly on the latest aircraft that AirBoeingBus produces.

It will happen as soon as we develop a one world electronic currency and dissolve our borders, having only continents rather than nations. The United Nations will finally rule the world, renamed the United Terran Council, a condition for our eventual membership in the United Federation of Planets. The new world language will be a mix of Mandarin, English, Spanish and Arabic, written with the Roman alphabet and Arabic numerals.

Gee, fantasy is fun.


User currently offlineVoodoo From Niue, joined Mar 2001, 2074 posts, RR: 0
Reply 6, posted (10 years 2 months 1 day 3 hours ago) and read 4172 times:

Interesting that while a lot of airlines and `industry experts' talk about the `need for consolidation', a lot of sub-branding and devolution is simultaneously happening. e.g. Star' members: UAL/Ted; and SAS-Denmark, -Braathens, -Sweden; etc. I guess you have to think of airlines as 3-dimensional rather than 2-dimensional organizations with different hiearchies possible.


` Yeaah! Baade 152! Trabi of the Sky! '
User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 7, posted (10 years 2 months 1 day 2 hours ago) and read 4130 times:

"Gee, fantasy is fun"

It is not fantasy. Look at all the de-regulation that has already taken place over the last 10 years. KLM has merged with Air France, the first of probably many cross boarder/flag carrier mergers...



User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 8, posted (10 years 2 months 1 day 2 hours ago) and read 4092 times:

The foreign ownership rule in the U.S would prevent UA and US from merging with LH and SAS, for starters. LH,UA, and SAS are three founding members of that alliance.

The same holds for AA and BA. Can't happen.

While the rule may eventually be changed to allow 49%, it will most likely never go above 50.1%.

As far as LH and SAS, who knows. I have no idea what EU law states, or even German/Danish law allows.


User currently offlineUshermittwoch From Germany, joined Jan 2004, 2965 posts, RR: 16
Reply 9, posted (10 years 2 months 1 day 2 hours ago) and read 4076 times:

We like free enterprise...
 Big grin



Where have all the tri-jets gone...
User currently offlineN757kw From United States of America, joined Sep 2003, 435 posts, RR: 0
Reply 10, posted (10 years 2 months 1 day 1 hour ago) and read 4049 times:

Lets look at this from a regulatory side. I will use Skyteam for example, You have Delta, Air France, and Korean Air (there are others but I am going to keep it simple). Where would you hold your operating certificate Korea, France, the U.S.? Which rules are you going to follow, FAA, JAR, other some other country. How about airport slots and bilateral agreements?

Which flights are international which are domestic? Then you would have to eventually have the issue of aircraft types and parts and employee relations.

You can make it work, but I am not sure over the long haul you will gain the economies of scale. Plus, if one of your areas has a bad financial year will it hurt all operations.

Even within the current alliances you have issues. So, if it goes to a mega airline you will end up with less choice, maybe no improvements in service over time, and well just plain boring.

The world would be a very boring place if we only have four airlines.

N757KW



"What we've got here, is failure to communicate." from Cool Hand Luke
User currently offlineVoodoo From Niue, joined Mar 2001, 2074 posts, RR: 0
Reply 11, posted (10 years 2 months 1 day 1 hour ago) and read 4015 times:

StevenUHL777 wrote:
The same holds for AA and BA. Can't happen.
While the rule may eventually be changed to allow 49%, it will most likely never go above 50.1%.
------------

Those points have `importance' only if you stick to some sort of rigid definition of `merger'. There are plenty of of multinational corporations in other industries that have no problem in duplicating, or creating, a brand in different countries, including the US, where `percentages of ownership' are not overtly transparent and/or identical in each country that the brand operates.



` Yeaah! Baade 152! Trabi of the Sky! '
User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 12, posted (10 years 2 months 1 day ago) and read 3950 times:

I agree, it would be boring if we only had four airlines, but if it results in cheaper fairs and a profitable airline then the majority of people would benefit by being able to visit friends and family more regularly, businesses saving travel costs making plasma tv's cheaper etc etc.

As Voodoo points out, it would not be difficult for all Star Alliance partners to merge tomorrow, but what would stop American buying a 49% share in BA and BA buying a 49% share in AA? They wouldn't officially merge, but they more or less would be the same company.

Also full mergers couldn't happen now maybe, BUT REGULATION CAN CHANGE. Bilateral air agreements, airport slots and ownerships rules have and will continue to change.

As for the argument about which country's rules would you operate under, again there may well be an increasing consolidation of rules. It makes little sense to have different rules in different country's...shipping manages it succesfully, although you do have far too many registered in the Nassau for my liking!


User currently offline22right From United States of America, joined Apr 2004, 420 posts, RR: 1
Reply 13, posted (10 years 2 months 19 hours ago) and read 3831 times:

The absolute precise timing of the merger may be hard to pin-point, but sources close to United CEO Glenn Tilton suggest that the merger announcement should come out around 17:00 GMT on Friday, May 1st, 2020. However, Mr. Tilton currently has a hair-cut appointment on his calendar at that time. The final time can only be finalized depending on whether his hair-dresser can slot him in the morning instead. If not, then it may have to be done sometime on Tuesday, May 5th, 2020.

At this time, Monday, May 4th, 2020 looks out of the question because, unfortunately, Mr. Tilton has promised his wife that he will plant new spring flowers and do some spring cleaning around the house on that day.

Please stay tuned to this thread for further developments on this important matter.





"I never apologize! I am sorry, but that's the way it is!" - Homer Simpson
User currently offlineRobsawatsky From Canada, joined Dec 2003, 597 posts, RR: 0
Reply 14, posted (10 years 2 months 19 hours ago) and read 3795 times:

I think airline alliances could go two ways, either get bigger or fall apart. Since they essentially exist to create route/ticketing benefits without engaging in any significant cross-ownership issues, the alliances will exist as long as this arrangement provides a business benefit to the majors in each alliance.

If international mergers were to occur, you could bet that the majors would attempt to put together a group of airlines that would provide the benefits of the alliance under the control of a single company. Then, the super-big new airline can depart the alliance. The weakened alliance could be mortally wounded by such a move or re-organize with new members or another alliance to combat the super-big airline.


User currently offlineAntares From Australia, joined Jun 2004, 1402 posts, RR: 39
Reply 15, posted (10 years 2 months 8 hours ago) and read 3632 times:

Never. The customers would run away.

I mean, what safety regulations would apply. None. It would be the rule of the cheapest, just like the port of convenience rust buckets that now carry most of the world's freight, pay 20 cents an hour, and constitute a major environmental hazard in shipping lanes. Every pilot on more than $100K would be retrenched in favour of cheaper pilots. Every country would loose the services it needs for its tourism or business needs because some dim witted analyst (Yup, I'm one of them) would prove beyond all doubt that the only routes worth flying were those the suited the suits on Wall Street. 99% of the networks would be declared unecomonic by the nincompoops.

It would be the greatest joke of all time. Can you imagine a board of directors drawn up so that it fairly (not!) represented the interests of the national shareholders of the merged entity.

Or writing a letter of complaint to a consumer affairs division in some remote part of the globe, which doesn't recognise your own consumer protection laws.

The alliances are just like the hastily buried or now largely ignored co-operative web portals on which dozens of airlines were going to tender for everything from envelopes to fuel.

What an infantile joke that turned out to be. They were about as reliable as Microsoft Office, and as vulnerable, not to mention totally incapable of performing the functions set out for them.

I can still remember the glee with which one major Asia carrier said it looked forward to alliances and portals, because it got to find out what its competitors wanted and how much they wanted to pay, and could make sure they didn't get it or paid twice as much, as well as conning others into taking over all of its less profitable routes as a code share.

There is NO SUBSTITUTE for raw, brand versus brand competition, whether we talk price, quality, punctuality or safety.

Airlines have to perform or die. Look around. There is a lot of dying going on at the moment.



User currently offlineScotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3
Reply 16, posted (10 years 2 months 7 hours ago) and read 3600 times:

Lets use the analogy of the automobile industry. Ford own Jaguar, Volvo, LandRover, Mazda; GM owns Saab, Vauxhall, Opal and I'm sure quite a few others. At one time there were lots of independent auto manufacturers that are now under one entity, others keep their brand name.......I cannot see why airlines are any different.

The present business model of the major carriers is deficient. Something has to change and if it is cross-border mergers so be it. I for one think it would be cool to see a British-American or American-British 777 at EDI!



User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 17, posted (10 years 2 months 4 hours ago) and read 3496 times:

As Scotron11 points out very well, other organisations such as Coca Cola, GE, Ford et al seem to manage operating internationally very well, often operating different brands in different markets. In my opinion, the airline industry is no different.


User currently offlineRichardw From United Kingdom, joined May 2001, 3749 posts, RR: 0
Reply 18, posted (10 years 2 months 4 hours ago) and read 3478 times:

In Europe, I can see BD, LH and SAS working closer together to compete more against BA/IB, AF/KL and EZY and FR. This might be just a merging of Brands.

User currently offlineAntares From Australia, joined Jun 2004, 1402 posts, RR: 39
Reply 19, posted (10 years 2 months 4 hours ago) and read 3467 times:

Reality check. The cross bordered and merged motor industry is in aggregate in dead serious trouble, in the US, in the UK, in Germany, in Korea and in Japan and even Australia. The enterprises currently on fire and sinking include Daimler/Chrysler and Mitsubishi, but other ruinous episodes involve the experiments or adventures of BMW and Audi/Vokswagen. All fine brands I made add, just truely gruesomely bad at making it work in the cross border environment.

What on on earth are you guys taking (and where can I get some) in relation to the auto industry?

Please do a stock market or securities database search on Coca Cola, GE and Ford in relation to these amazing success stories and then find your way back to 2004.

Certainly success in some markets, but disasters in others, a weakness in globalised strucutres addressed by an earlier post.

There is some light at the end of the tunnel, in that the structure of the AF/KLM deal shows a great deal of potential for exploiting future reforms of the European aviation market and the epic and slow but maybe oneday successful attempts to reform the aviation market between the US and Europe.

Sadly in business the only mergers and acquisitions that survive over time are those where one company actually kills the other, carving up the body for the useful parts, but savings the cost of two sets of managements, two sets of legal environments, two sets of workers, two sets of distribution channels (like car dealers) and so forth.

If anyone really thinks that an American/British Airways combination controlled and headquartered in the US will be good for British air travellers, or BA employees....just keep taking the medication. And it won't be controlled in the UK if it happens. Never will the US cede the control of a major section of its air transport industry to them blasted furriners.



User currently offlineHighliner2 From United States of America, joined Nov 2000, 696 posts, RR: 2
Reply 20, posted (10 years 1 month 4 weeks 1 day 22 hours ago) and read 3375 times:

Antares,

Your absolutely correct, comparing the airline industry to the auto industry, or any other for that matter, is like comapring apples to oranges.

And having four massive carriers will not drive down fares. Not one bit, with less compeitition comes higher fares.

There may be consolidation within regions, Star Alliance members in Europe may consolidate, the same goes in the US. But your not going to see a merger across the Atlantic. The US government will never allow it. Just look how much trouble Mr. Branson is having just trying to start a US domestic carrier as a foreigner, or how much a struggle the AA BA alliance was.



Go Cubs!
User currently offlineRwylie77 From United Kingdom, joined May 2004, 367 posts, RR: 2
Reply 21, posted (10 years 1 month 4 weeks 1 day 15 hours ago) and read 3283 times:

I think what the question that needs to be asked is which airlines currently are growing and are profitable. EasyJet, Jetblue etc...all started because regulation was eased and market forces allowed to rule. Governments across the globe should just open the skies and allow free competition, and if they are worried, look at Emirates. As for the success of multinational companies, how many of the biggest 100 organisations in the world by market cap have a global presense? All of them - the car industry may not be the best example, but look at Citigroup etc...they seem to manage it. If BA and AA merged, so what if AA owned BA? BA would still operate very similarly as it does today except a few duplicate jobs removed. BA's offices wouldn't close, just the ownership structure. Roll on free enterprise.

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