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eisenbach
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Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 12:52 pm

Quiet interesting: Star Alliance CEO Jeffrey Goh is talking about integrating LCC into Star Alliance.

Your thoughts!?

Maybe Eurowings is getting a Star-Member?
Would Oneworld or Skyteam follow?


Due to the increased popularity of no-frills airlines with consumers in recent years, Star Alliance has opened up the option for existing members to form partnerships with budget carriers.

“Many of our members and many airlines around the world are moving a lot to lower-cost platforms,” said Jeffrey Goh, Chief Executive Officer of Star Alliance. “We want to find a way of recapturing these markets offering the benefits and privileges that they used to have and enjoy. We want to use this connecting partner model.”

Source: http://www.bloomberg.com/news/articles/ ... s-partners
DC-6, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, ATR42, ATR72, Dash8-400Q, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
Bhoy
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:06 pm

For 'Increased popularity of no-frills airlines with consumers' read 'Airline CEO's obsession with cutting back on included perks in Y fares'...
 
noofaq
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:09 pm

You can already get miles for flights on Eurowings - I have already done few connections on Eurowings when booking via LH.com website and miles were added to my account just like normal Star Alliance flight. It happens especially when connecting intra-European via DUS.
 
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eisenbach
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:11 pm

noofaq wrote:
You can already get miles for flights on Eurowings - I have already done few connections on Eurowings when booking via LH.com website and miles were added to my account just like normal Star Alliance flight. It happens especially when connecting intra-European via DUS.


In which milage program are you? I though just Miles&More members are getting miles on EW flights.
DC-6, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, ATR42, ATR72, Dash8-400Q, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
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DWC
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:17 pm

Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...
Last edited by DWC on Thu Feb 08, 2018 1:19 pm, edited 1 time in total.
 
noofaq
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:19 pm

eisenbach wrote:
In which milage program are you? I though just Miles&More members are getting miles on EW flights.


Yes, I am in Miles&More. Once I have tried to book flight directly from Eurowings.com website I was unable to get miles (no place to put M&M card number), but booking the same flight via LH.com allowed me to do that. It was quite a time ago so maybe something changed; I remember also that I wasn't able to buy connecting ticket there too (but again possible via LH.com) but it is a different matter I guess.

For me it seems like Eurowings is already kind of "like" Star Alliance - officially it is not Star Alliance partner, but you get (at least some) perks of your M&M status and get miles counted. If Eurowings is planned to be "formal Star Alliance" partner it does not change much at all - in my opinion Eurowings is already nearly integrated.
 
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eisenbach
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:24 pm

DWC wrote:
Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...


I am as well not happy with the Air Berlin situation and the influence of the German government in favour of LH, but I think regulation will not help as well. Even very large airline conglomerates can fail on a free market - a new innovative competitor or internal problems at large companies can change everything within a short time!

... and adding more airlines to an alliance will still keep competition going (have a look of the competition within the alliances, as LH vs TK or QR vs QA).
DC-6, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, ATR42, ATR72, Dash8-400Q, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
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eisenbach
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:26 pm

noofaq wrote:
eisenbach wrote:
In which milage program are you? I though just Miles&More members are getting miles on EW flights.


Yes, I am in Miles&More. Once I have tried to book flight directly from Eurowings.com website I was unable to get miles (no place to put M&M card number), but booking the same flight via LH.com allowed me to do that. It was quite a time ago so maybe something changed; I remember also that I wasn't able to buy connecting ticket there too (but again possible via LH.com) but it is a different matter I guess.

For me it seems like Eurowings is already kind of "like" Star Alliance - officially it is not Star Alliance partner, but you get (at least some) perks of your M&M status and get miles counted. If Eurowings is planned to be "formal Star Alliance" partner it does not change much at all - in my opinion Eurowings is already nearly integrated.


Hi, I think this just works because you are in Miles&More (as EW is somehow integrated). If you are a UA or TK frequent flyer you don't get any miles I guess.
DC-6, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, ATR42, ATR72, Dash8-400Q, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
avek00
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:30 pm

DWC wrote:
Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...


1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

2. Since the dawn of international aviation, regulators have generally sought to *discourage* a free-for-all competitive environment, preferring immunized cartels and structural limitations to avoid a "race to the bottom" that ultimately hurts the consumer.
Live life to the fullest.
 
Bhoy
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:41 pm

avek00 wrote:
DWC wrote:
Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...


1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

Exactly, it's. It the Alliances that limit market choice, it's the various Intercintinental Joint Ventures, none of which encompass all Alliance members flying between particular Continents (e.g. SQ, SK and LO offer Europe-North America flights within Star without being in the UA/AC/LH/LX/SN/OS Joint Venture.
 
GianiDC
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 1:42 pm

I think "real" LCCs like FR and U2 wouldn´t be interested in joining an alliance generally. The offer seems to be focused on in-house LCC spinoffs like EW or SQ´s Scoot.
 
frmrCapCadet
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 2:04 pm

avek00 wrote:
DWC wrote:
Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...


1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

2. Since the dawn of international aviation, regulators have generally sought to *discourage* a free-for-all competitive environment, preferring immunized cartels and structural limitations to avoid a "race to the bottom" that ultimately hurts the consumer.


Agree with all of the above, and realize that there are contradictions. Airlines are in part a utility. The economies of most nations are dependent upon them. But actual free market competition has repreatedly proven ruinous. If airlines only survive as 'immunized cartels', then citizens and customers need to demand appropriate regulations. Utilities may be the right model. Any economists to speak up on the issue?
Buffet: the airline business...has eaten up capital...like..no other (business)
 
WestendRaider
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 2:13 pm

Right now within Star Alliance, the following member airlines have LCC subsidiaries:
Air Canada --> Air Canada Rouge
Lufthansa --> Eurowings
ANA --> Peach & Vanilla
Singapore Airlines --> Scoot
Asiana --> Air Seoul
Thai Airways --> Thai Smile
SAA --> Mango
 
jubguy3
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 2:37 pm

As if star wasn't overcrowded as is.
 
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DWC
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 2:37 pm

Bhoy wrote:
avek00 wrote:
DWC wrote:
Regulators should look into *A & at least split it in two, has enough carriers to make two world alliances : adding more airlines is a free economy nonsense. Competition wise, I don't know how the EU allowed LH to swallow that many airlines or Chile & Brazil allow for the LAN-TAM merger, both groups now have a disproportionate market share & can thus influence fares & command premiums.
Even the US3 are an unethical Legacy combo in a market of 320 million consumers...


1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

Exactly, it's. It the Alliances that limit market choice, it's the various Intercintinental Joint Ventures, none of which encompass all Alliance members flying between particular Continents (e.g. SQ, SK and LO offer Europe-North America flights within Star without being in the UA/AC/LH/LX/SN/OS Joint Venture.

Cute, you really need to shun romantic opinions & read academic research papers covering aviation.
I am not saying alliances do not benefit consumers in some ways, but they do thwart the market in many significant aspects. To summarize :
1. Alliances & FF programmes orient FF consumers decisions : FF & codeshares specifically discourage them from looking into other options.
A case in point is QF : 40% of Oz are said to have a QF card, QF also owns JetStar & has an extensive long-haul agreement with EK.
2. Alliances also foster cooperation between members, connecting flights & departure times, thereby actually reducing competition
3. In fact, this is epitomized by JVs which are a form of "legalized oligopolies", "immunized" says it all : it is against economics basics.
4. Alliance logic is now channelled to Terminals, thus reducing some connectivity by interlining or codeshares at other terminals within same airport
5. The overall livery branding on all alliance aircrafts aimed at fostering brand/alliance awareness also aims at luring new customers & thus to discourage them from using whatever remaining non-aligned airlines serving particular markets.
6. Alliance FF lounges lure their clients to the detriment of competing retaurants & services within airports
Last edited by DWC on Thu Feb 08, 2018 2:43 pm, edited 3 times in total.
 
NZ321
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 3:18 pm

Agree Star IS overcrowded. They should focus on quality and consistency over volume. The former needs work. Or go ahead as they may wish and then the opportunity is there for OneWorld or Skyteam to take or another Alliance to emerge. The whole point of alliances is consistency in interline and feed. Don't see how LCC helps this a a significant degree. Someone enlighten me.
Plane mad!
 
OSL777FLYER
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 3:55 pm

eisenbach wrote:
noofaq wrote:
You can already get miles for flights on Eurowings - I have already done few connections on Eurowings when booking via LH.com website and miles were added to my account just like normal Star Alliance flight. It happens especially when connecting intra-European via DUS.


In which milage program are you? I though just Miles&More members are getting miles on EW flights.


You can get miles for Eurowings flights on United Mileage Plus. Quite generous too.
 
SurfToAir
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 4:02 pm

OSL777FLYER wrote:
eisenbach wrote:
noofaq wrote:
You can already get miles for flights on Eurowings - I have already done few connections on Eurowings when booking via LH.com website and miles were added to my account just like normal Star Alliance flight. It happens especially when connecting intra-European via DUS.


In which milage program are you? I though just Miles&More members are getting miles on EW flights.


You can get miles for Eurowings flights on United Mileage Plus. Quite generous too.


Even if you book through eurowing.com
 
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yowza
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 4:43 pm

DWC wrote:
Bhoy wrote:
avek00 wrote:

1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

Exactly, it's. It the Alliances that limit market choice, it's the various Intercintinental Joint Ventures, none of which encompass all Alliance members flying between particular Continents (e.g. SQ, SK and LO offer Europe-North America flights within Star without being in the UA/AC/LH/LX/SN/OS Joint Venture.

Cute, you really need to shun romantic opinions & read academic research papers covering aviation.
I am not saying alliances do not benefit consumers in some ways, but they do thwart the market in many significant aspects. To summarize :
1. Alliances & FF programmes orient FF consumers decisions : FF & codeshares specifically discourage them from looking into other options.
A case in point is QF : 40% of Oz are said to have a QF card, QF also owns JetStar & has an extensive long-haul agreement with EK.
2. Alliances also foster cooperation between members, connecting flights & departure times, thereby actually reducing competition
3. In fact, this is epitomized by JVs which are a form of "legalized oligopolies", "immunized" says it all : it is against economics basics.
4. Alliance logic is now channelled to Terminals, thus reducing some connectivity by interlining or codeshares at other terminals within same airport
5. The overall livery branding on all alliance aircrafts aimed at fostering brand/alliance awareness also aims at luring new customers & thus to discourage them from using whatever remaining non-aligned airlines serving particular markets.
6. Alliance FF lounges lure their clients to the detriment of competing retaurants & services within airports


Devils advocate: I notice your avatar is an EY A380 and yet you seem bent on fairness. What do you make of the 2008 $3.012B loan with no fixed repayment terms from the government of Abu Dhabi to EY? Do you think that passes the "academic research papers" sniff test?

YOWza
 
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LOWS
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 4:59 pm

eisenbach wrote:
noofaq wrote:
eisenbach wrote:
In which milage program are you? I though just Miles&More members are getting miles on EW flights.


Yes, I am in Miles&More. Once I have tried to book flight directly from Eurowings.com website I was unable to get miles (no place to put M&M card number), but booking the same flight via LH.com allowed me to do that. It was quite a time ago so maybe something changed; I remember also that I wasn't able to buy connecting ticket there too (but again possible via LH.com) but it is a different matter I guess.

For me it seems like Eurowings is already kind of "like" Star Alliance - officially it is not Star Alliance partner, but you get (at least some) perks of your M&M status and get miles counted. If Eurowings is planned to be "formal Star Alliance" partner it does not change much at all - in my opinion Eurowings is already nearly integrated.


Hi, I think this just works because you are in Miles&More (as EW is somehow integrated). If you are a UA or TK frequent flyer you don't get any miles I guess.


I've not flown EW, but I did get 4U mileage credit on Mileage Plus, back in the day (circa 2011).

Apparently UA will give you credit for EW:
https://www.united.com/cms/en-US/marketing/custcomm/promotions/pages/airlinepartnerdetails.aspx?itemid=668
 
zakuivcustom
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 5:39 pm

WestendRaider wrote:
Right now within Star Alliance, the following member airlines have LCC subsidiaries:
Air Canada --> Air Canada Rouge
Lufthansa --> Eurowings
ANA --> Peach & Vanilla
Singapore Airlines --> Scoot
Asiana --> Air Seoul
Thai Airways --> Thai Smile
SAA --> Mango


There's also Air Busan for Asiana.

Another side note is that Peach & Vanilla currently are not in ANA's mileage program, nor there are any codeshare flights. This is in contrast to Jetstar Japan, which has extensive codeshare with JL.

As for the integration - maybe extending the "connecting partners" concept even further? Mango was supposed to become a "connecting partner" but that got pushed back. Right now Juneyao Airlines of China is the only "Connecting Partner" (By virtue of having codeshares with Shenzhen Airlines).
 
bevan7
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 5:43 pm

The main problem I have is lounge access, baggage and priority boarding. I'm star Alliance Gold so I make sure I choose itineraries that don't include Eurowings as I don't get these perks. If Eurowings included these perks then I'm far more likely to fly them.
 
RJNUT
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 6:16 pm

in addition to Thai Smile , could they add KokSnoot?
 
JayBCNLON
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 7:19 pm

noofaq wrote:
eisenbach wrote:
In which milage program are you? I though just Miles&More members are getting miles on EW flights.


Yes, I am in Miles&More. Once I have tried to book flight directly from Eurowings.com website I was unable to get miles (no place to put M&M card number), but booking the same flight via LH.com allowed me to do that. It was quite a time ago so maybe something changed; I remember also that I wasn't able to buy connecting ticket there too (but again possible via LH.com) but it is a different matter I guess.

For me it seems like Eurowings is already kind of "like" Star Alliance - officially it is not Star Alliance partner, but you get (at least some) perks of your M&M status and get miles counted. If Eurowings is planned to be "formal Star Alliance" partner it does not change much at all - in my opinion Eurowings is already nearly integrated.



If you have a profile on Eurowings.com you can choose whether you want to collect points via eurowings’ own Program boomerang or via miles& more. And you can enter and save your M&M number there.
 
77H
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 7:58 pm

DWC wrote:
Bhoy wrote:
avek00 wrote:

1. Global alliances are primarily marketing and member process improvement organizations. Absent more, mere alliance membership does not radically alter competitive dynamics.

Exactly, it's. It the Alliances that limit market choice, it's the various Intercintinental Joint Ventures, none of which encompass all Alliance members flying between particular Continents (e.g. SQ, SK and LO offer Europe-North America flights within Star without being in the UA/AC/LH/LX/SN/OS Joint Venture.

Cute, you really need to shun romantic opinions & read academic research papers covering aviation.
I am not saying alliances do not benefit consumers in some ways, but they do thwart the market in many significant aspects. To summarize :
1. Alliances & FF programmes orient FF consumers decisions : FF & codeshares specifically discourage them from looking into other options.
A case in point is QF : 40% of Oz are said to have a QF card, QF also owns JetStar & has an extensive long-haul agreement with EK.
2. Alliances also foster cooperation between members, connecting flights & departure times, thereby actually reducing competition
3. In fact, this is epitomized by JVs which are a form of "legalized oligopolies", "immunized" says it all : it is against economics basics.
4. Alliance logic is now channelled to Terminals, thus reducing some connectivity by interlining or codeshares at other terminals within same airport
5. The overall livery branding on all alliance aircrafts aimed at fostering brand/alliance awareness also aims at luring new customers & thus to discourage them from using whatever remaining non-aligned airlines serving particular markets.
6. Alliance FF lounges lure their clients to the detriment of competing retaurants & services within airports


With all due respect I’m not really sure what you’re getting at ? You argue that cooperative FF programs are bad because they discourage people from looking at other options. Who’s that really on, the airlines or the individual? No one is forcing anyone to stay with a specific airline or alliance FF program. You’re the consumer, you have all the power. You’re not signed up for a FF program automatically. Each individual makes that choice. Additionally, once signed up, no FF program or alliance forbids a program member from flying outside the alliance.

It almost sounds like you’re shaming the alliances for promoting their services. What company, regardless of industry doesn’t do this? The big4 telecommunications companies in the US are constantly advertising how their network is better than the other 3. By your logic, signing up for service with a telecommunications company is bad for consumers because after you sign up you’re not looking at the other options including the smaller companies. Again, your choice to make.

Do you think monogamy is bad for “consumers” too? If a person promotes themselves on a first date, and I ultimately marry that person, is that bad for me because now other people don’t have a chance with me?

77H
 
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DWC
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 8:03 pm

yowza wrote:
Devils advocate: I notice your avatar is an EY A380 and yet you seem bent on fairness. What do you make of the 2008 $3.012B loan with no fixed repayment terms from the government of Abu Dhabi to EY? Do you think that passes the "academic research papers" sniff test?

Loans to strategic enterprises are covered by GATT & WTO agreements, I am not more privy to EY's financial statements than anyone here as they are not public. As EY are a government entreprise, they are the shareholder & as such maximize more things than mere pax revenue, i.e. economic externalities to their economy & "country brand" awareness within a strategy of economic diversification after the oil boom, and both have done remarkably well & below the costs of any direct targetted marketing campaign. The amount of free buzz around EY & AUH has been phenomenal, just second or third to EK & SQ. As I see it, the previous strategy did what it was meant to, by now more money will not improve or brand further AUH or the whole state of Abu Dhabi more than it already did in the past decade, time to change strategies & make EY profitable. Obviously AB's & AZ's demise were not expected, the costs are sunk, the next question is : are EY viable considering the very competitive environment all around ? Considering how the aviation market is doubling every 15 years, I think EY can manage, but it sure is an economic & service oddity next to EK-FZ, QR, SV & WY. That said, I do not consider myself an UAE expert, I only chose the pic because I found EY & the DWC whole idea very unusual, each conspicuous in so many ways with a future written with question marks... But they sure know what they are doing, more is to come in the 2020s... ;)
 
kriskim
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 8:51 pm

RJNUT wrote:
in addition to Thai Smile , could they add KokSnoot?


When WE was first formed, it was part of *A, how come they changed?

IMHO Thai Smile is not a LCC, it’s more in lined with SQ’s Silk Air and CX’s Cathay Dragon.
A world built upon connectivity.
 
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aemoreira1981
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 9:12 pm

GianiDC wrote:
I think "real" LCCs like FR and U2 wouldn´t be interested in joining an alliance generally. The offer seems to be focused on in-house LCC spinoffs like EW or SQ´s Scoot.


There are two low cost airline alliances...Vanilla and Value. As for Star Alliance, Juneyao Airlines is a connecting partner in the alliance. That’s likely the basis here.
 
2travel2know2
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 10:56 pm

zakuivcustom wrote:
WestendRaider wrote:
Right now within Star Alliance, the following member airlines have LCC subsidiaries:
Air Canada --> Air Canada Rouge
Lufthansa --> Eurowings
ANA --> Peach & Vanilla
Singapore Airlines --> Scoot
Asiana --> Air Seoul
Thai Airways --> Thai Smile
SAA --> Mango


There's also Air Busan for Asiana.
Add CM Wingo
I'm not on CM's payroll.
 
zakuivcustom
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 11:09 pm

aemoreira1981 wrote:
GianiDC wrote:
I think "real" LCCs like FR and U2 wouldn´t be interested in joining an alliance generally. The offer seems to be focused on in-house LCC spinoffs like EW or SQ´s Scoot.


There are two low cost airline alliances...Vanilla and Value. As for Star Alliance, Juneyao Airlines is a connecting partner in the alliance. That’s likely the basis here.


You meant Value and U-Fly. Vanilla is anything but LCC alliance (It's Alliance of Indian Ocean Island Airlines).

On the other hand, Value Alliance actually have Nok, NokScoot, Scoot, Vanilla, and Tigerair Australia, all 5 associated with *A to certain extent (It's hard to say what Virgin Australia is...it's half Skyteam half *A). U-Fly is nothing more than "Just create an alliance" that means nothing anyway (4 HNA group members + Eastar...yep)
 
Arion640
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Thu Feb 08, 2018 11:43 pm

Can only really see it possible for Lowco's owned by the legacies.

But you won't see Ryanair and easyjet part of something like this anytime soon.
319 320 321 333 346 359 388 733 73G 738 744 752 753 763 772 77E 773 77W 788 789 E145 E175 E195 RJ85 F70 DH8C DH8D AT75

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DWC
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Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Fri Feb 09, 2018 9:14 pm

77H wrote:
You argue that cooperative FF programs are bad because they discourage people from looking at other options. Who’s that really on, the airlines or the individual? No one is forcing anyone to stay with a specific airline or alliance FF program. You’re the consumer, you have all the power. You’re not signed up for a FF program automatically. Each individual makes that choice. Additionally, once signed up, no FF program or alliance forbids a program member from flying outside the alliance.

It almost sounds like you’re shaming the alliances for promoting their services. What company, regardless of industry doesn’t do this? The big4 telecommunications companies in the US are constantly advertising how their network is better than the other 3. By your logic, signing up for service with a telecommunications company is bad for consumers because after you sign up you’re not looking at the other options including the smaller companies. Again, your choice to make.

Do you think monogamy is bad for “consumers” too? If a person promotes themselves on a first date, and I ultimately marry that person, is that bad for me because now other people don’t have a chance with me?

I just read your comment & questions, sorry I missed them yesterday. The subject is more complex than how you or I argued about it. For starters, consumers do not have all the power as they do not have all the information nor the training to handle it all usually. What is generally observed is a sheepish behaviour whereby consumers do what other consumers do without much reflexion, in fact FF programmes turn them into point/miles searching bean counters instead of focusing on their "utility function" ( other things they could consider ), there is a wide literature on economics about "perfect symmetric information" & "rational behaviours" on which the whole system is based, but where neither of these two hypothesis are actually met. So instead of having an optimum offer & demand system to reach economic optima, we get instead a bunch of oligopolies running the show & doing as they please. It's thus more what the Alliances & FF programmes do than Pax decisions that are detrimental, because in the end consumers always do what they are expected to if the product is good & information both imperfect ( they don't know the whole story ) & asymemtric ( airline executives know way more ).

Just to give an example, DL has forced this past year many Skyteam airlines to sever all codeshares with DL's direct competitors ( Alaska for one ) & even with a number of non Skyteam airlines which were usuful to other Alliance members : It is thoroughly "uncompetitive" in a "mature" market as the US ( read oligopolistic with all US3 already cutting down on service in Y ), because the same model is now being imposed on foreign carriers serving the US, all detrimental to the consumer & benefitting the alliance's core airlines. Otherwise put, Pax have no choice but the ones offered & ever reduced, even FF points are devaluated at airlines will & there is absolutely nothing FF members can do. And yet the kids remain happy collecting points & award tickets nonetheless.
 
77H
Posts: 1129
Joined: Mon Sep 19, 2016 11:27 pm

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Fri Feb 09, 2018 9:42 pm

DWC wrote:
77H wrote:
You argue that cooperative FF programs are bad because they discourage people from looking at other options. Who’s that really on, the airlines or the individual? No one is forcing anyone to stay with a specific airline or alliance FF program. You’re the consumer, you have all the power. You’re not signed up for a FF program automatically. Each individual makes that choice. Additionally, once signed up, no FF program or alliance forbids a program member from flying outside the alliance.

It almost sounds like you’re shaming the alliances for promoting their services. What company, regardless of industry doesn’t do this? The big4 telecommunications companies in the US are constantly advertising how their network is better than the other 3. By your logic, signing up for service with a telecommunications company is bad for consumers because after you sign up you’re not looking at the other options including the smaller companies. Again, your choice to make.

Do you think monogamy is bad for “consumers” too? If a person promotes themselves on a first date, and I ultimately marry that person, is that bad for me because now other people don’t have a chance with me?

I just read your comment & questions, sorry I missed them yesterday. The subject is more complex than how you or I argued about it. For starters, consumers do not have all the power as they do not have all the information nor the training to handle it all usually. What is generally observed is a sheepish behaviour whereby consumers do what other consumers do without much reflexion, in fact FF programmes turn them into point/miles searching bean counters instead of focusing on their "utility function" ( other things they could consider ), there is a wide literature on economics about "perfect symmetric information" & "rational behaviours" on which the whole system is based, but where neither of these two hypothesis are actually met. So instead of having an optimum offer & demand system to reach economic optima, we get instead a bunch of oligopolies running the show & doing as they please. It's thus more what the Alliances & FF programmes do than Pax decisions that are detrimental, because in the end consumers always do what they are expected to if the product is good & information both imperfect ( they don't know the whole story ) & asymemtric ( airline executives know way more ).

Just to give an example, DL has forced this past year many Skyteam airlines to sever all codeshares with DL's direct competitors ( Alaska for one ) & even with a number of non Skyteam airlines which were usuful to other Alliance members : It is thoroughly "uncompetitive" in a "mature" market as the US ( read oligopolistic with all US3 already cutting down on service in Y ), because the same model is now being imposed on foreign carriers serving the US, all detrimental to the consumer & benefitting the alliance's core airlines. Otherwise put, Pax have no choice but the ones offered & ever reduced, even FF points are devaluated at airlines will & there is absolutely nothing FF members can do. And yet the kids remain happy collecting points & award tickets nonetheless.


Again, I fail to see how consumer ignorance is any fault of the airlines or alliances? We live in a time where boundless amounts of information can be accessed at any time in almost any place. In my opinion it is entirely incumbent on the consumer to do their own due diligence before purchasing a product or service.

The airlines, like most businesses are in business to make money. That’s their number one objective. Not to hand hold and pander to individual consumers. You mention DL’s FF program and the changes they’ve made. If you don’t like the changes, you are free to take your business elsewhere. No one is contractually obligated to stay a skymiles member that I’m aware of. The bottom line in the example you gave is that DL is competing with AS as competitors will do and DL has the influence, being the largest sky team member, to get their partners to follow suit.

Does the above competitive tactic negatively impact AS customers. Sure, but those customers also have other options for air travel. At that point it comes down to individual preferences. Is AS the most convenient option for the majority of ones travel needs? If yes, you stay and put up with the inconvenience of reduced options for select travel needs. If not, you find an airline, alliance, etc that checks off the most boxes for you.

77H
 
Obzerva
Posts: 304
Joined: Wed Jan 11, 2017 3:48 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Fri Feb 09, 2018 9:45 pm

Considering it's been a long while since ANY airline joined an alliance, I think this is window dressing to make it look like the alliances are still relevant.
looking at the last dates of any airline joining one of the three major alliances.
Star - Jul 2014 Air India
Oneworld - May 2014 Sri Lankan
SkyTeam - Mar 2014 Garuda

and the smaller alliances:
Vanilla Alliance, created July 2015, 5 members, no new members since
Value Alliance, created May 2016, 6 members, no new members since
U-Fly alliance, created Jan 2016 with 4 members, one new member since (Easter Jet, Jul 2016)

It's now 3.5 years since any of the three majors received a new member, and even with IAG taking full ownership of Aer Lingus, EI is not joining Oneworld, despite sitting above Vueling and Level in the service stakes.

I think we're at the top of the bell curve of alliance memberships, we're at the the point, there's no significant benefit in joining, when agreements and joint ventures stimulate more demand, but no advantage in leaving at this point.

Adding LCCs sounds like a way to stimulate memberships, or simply squeezing EW in to Star, there doesn't seem to be any current appetite for airlines to join an alliance.
 
zkncj
Posts: 3023
Joined: Wed Nov 09, 2005 4:57 pm

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Fri Feb 09, 2018 10:53 pm

WestendRaider wrote:
Right now within Star Alliance, the following member airlines have LCC subsidiaries:
Air Canada --> Air Canada Rouge
Lufthansa --> Eurowings
ANA --> Peach & Vanilla
Singapore Airlines --> Scoot
Asiana --> Air Seoul
Thai Airways --> Thai Smile
SAA --> Mango


Then you get *A airlines like Air New Zealand who are running there short/medium hall (under 10hours) services like an LCC, yet are still allowed to be apart of the Alliance.
 
User avatar
DWC
Posts: 462
Joined: Mon Nov 06, 2017 7:49 pm

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 12:19 am

77H wrote:
1. Again, I fail to see how consumer ignorance is any fault of the airlines or alliances?
2. We live in a time where boundless amounts of information can be accessed at any time in almost any place.
3. In my opinion it is entirely incumbent on the consumer to do their own due diligence before purchasing a product or service.
4. If you don’t like the changes, you are free to take your business elsewhere. No one is contractually obligated to stay a skymiles member that I’m aware of.
5. DL has the influence, being the largest sky team member, to get their partners to follow suit.

You must read more of economics to understand what is happening. I numbered some of your arguments to address them specifically.
1. It is not anyone's fault legally, but airlines & alliance know them & make use of them : therefore information is imperfect & asymmetric, we are no longer speaking of free market, it is a market failure, true & perfect competition are not happening. In fact, the US3 are an oligopoly & would not have happened had the Sherman Act not been scrapped.
2. Too much information kills information. In fact, most of the information is NOISE, buzz, real information is drowned. Or distorted.
3. Only if the consumer is taught well. Being ignorant is a failure of the system before being that of the individual. The very fact a-net exists & draws people is that the information is not readily available & known by all members, so it can be shared better. Point is few pax read a-net, flyertalk & others elsewhere in the world.
4. Not that simple : miles cannot be taken to another airline, let alone to another alliance, the best you can do is redeem them, or cash them when possible. Building up status with any other airline may take a year or more for most pax, that in itself is a deterrent and a barrier to free competition. This is known in economics as "non contestable markets", with dire costs to enter & to exit.
5. DL or AF's position is anticompetitive : one of the first tenets of free economics is that no actor is big enough to infliuence prices or actors' actions. Therefore the aviation market, regardless of the alliance, is not following free economics but something like "might is right" lipsticked with "free competition".
 
planeguy
Posts: 342
Joined: Tue Aug 07, 2001 4:42 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 1:57 am

The day that I see a Ryanair 737 sporting a *A livery is the day when I will have seen everything.
 
User avatar
aemoreira1981
Posts: 2106
Joined: Mon Jan 09, 2017 12:17 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 3:49 am

Obzerva wrote:
Considering it's been a long while since ANY airline joined an alliance, I think this is window dressing to make it look like the alliances are still relevant.
looking at the last dates of any airline joining one of the three major alliances.
Star - Jul 2014 Air India
Oneworld - May 2014 Sri Lankan
SkyTeam - Mar 2014 Garuda

and the smaller alliances:
Vanilla Alliance, created July 2015, 5 members, no new members since
Value Alliance, created May 2016, 6 members, no new members since
U-Fly alliance, created Jan 2016 with 4 members, one new member since (Easter Jet, Jul 2016)

It's now 3.5 years since any of the three majors received a new member, and even with IAG taking full ownership of Aer Lingus, EI is not joining Oneworld, despite sitting above Vueling and Level in the service stakes.

I think we're at the top of the bell curve of alliance memberships, we're at the the point, there's no significant benefit in joining, when agreements and joint ventures stimulate more demand, but no advantage in leaving at this point.

Adding LCCs sounds like a way to stimulate memberships, or simply squeezing EW in to Star, there doesn't seem to be any current appetite for airlines to join an alliance.


I still think 9W joins SkyTeam soon...it cooperates closely with many other SkyTeam airlines (an SPA with CZ and partnerships with DL, AF, KL, and VS). That said, for LCCs, I could see Star seeking to acquire Value and make that the LCC division of Star, noting how many of the LCC subsidiaries are separate AOCs.
 
slcdeltarumd11
Posts: 4103
Joined: Fri Jan 09, 2004 7:30 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 4:42 am

ULCC long haul is going to grow. If alliances don't keep up they will wish they had.
 
User avatar
LOWS
Posts: 1334
Joined: Sun Oct 23, 2011 5:37 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 4:48 am

Obzerva wrote:
Considering it's been a long while since ANY airline joined an alliance, I think this is window dressing to make it look like the alliances are still relevant.
looking at the last dates of any airline joining one of the three major alliances.
Star - Jul 2014 Air India
Oneworld - May 2014 Sri Lankan
SkyTeam - Mar 2014 Garuda


Are there gaping holes in these alliances that desperately needs filling?

It just seems like saying "oh, these things aren't growing anymore" is a bad way of judging their health.
 
rj777
Posts: 1727
Joined: Sat Dec 02, 2000 1:47 am

Re: Star Alliance CEO thinks of integrating Low Cost Carriers

Sat Feb 10, 2018 5:51 am

Wonder which Alliance WN would join?

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