Bigfoot
Topic Author
Posts: 63
Joined: Thu Dec 25, 2003 6:04 am

Swiss And The Alliances

Sun Nov 21, 2004 5:15 am

After finally deciding not to join Oneworld, Swiss is one of the few important European carriers not to be in an alliance.
Any thought regarding the possible future(s) of it??

BF
Madness takes its toll, please have exact change
 
anxebla
Posts: 1696
Joined: Tue Dec 23, 2003 8:31 am

RE: Swiss And The Alliances

Sun Nov 21, 2004 6:38 am

I've no idea, Bigfoot

Has anybody known what really happened on the Swiss-OneWorld issue? What was the real reason for Swiss to refuse join OW? ...... What was the BA's role on this matter?
AIRBUS 320 The world's most advanced single-aisle aircraft
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: Swiss And The Alliances

Sun Nov 21, 2004 7:32 am

To sum it up BA played foul, it least in Swiss's view.
 
rtfm
Posts: 421
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RE: Swiss And The Alliances

Sun Nov 21, 2004 6:45 pm

JoFMO: do you have anything to back up that statement??
 
johnnybgoode
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RE: Swiss And The Alliances

Sun Nov 21, 2004 8:46 pm

apparently, BA wanted LX to share all its customer info regarding its frequent flyers and top clients. LX feared that BA would be chasing after its high-yield customers and chose not to provide the data.
there were some additional in regard to LHR slots...

rgds
daniel
If only pure sweetness was offered, why's this bitter taste left in my mouth.
 
rtfm
Posts: 421
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RE: Swiss And The Alliances

Sun Nov 21, 2004 11:24 pm

Johnnybgoode: yes I thought that it was something to do with Swiss' FFP, but I would hardly call that BA playing foul.... BA put that as one of the conditions; Swiss decided it was a proce they weren't willing to pay. End of deal. Hardly skullduggery.....  Insane
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: Swiss And The Alliances

Mon Nov 22, 2004 12:00 am

@Rtfm:

From the Swiss perspective BA played foul, I would call it clever vs. stupid negotiation.
At the end Swiss expected some sort of investment from BA, therefore they were willing to give them their valuable frequent flyer list. In contrast BA never had the real intention to invest in Swiss, but Swiss expecting that they gave them some LHR-slots for in interim credit. While negotiations went on it became clear to Swiss that their expectations were too high and they all further talks were halted. But at that time had already delivered a lot to BA while they had nothing gained from them. In consequence Swiss lost it's slots BSL-LHR and GVA-LHR for ever and only got a 50million credit. BA even blocked their entry into Oneworld, although they have codeshare agreements with nearly every other oneworld carrier except BA.

As I see it now, Swiss tries to make some better results (the 3rd quarter was their first one in black, but further losses are expected for the weak season), so that they become an airline with some value, which doesn't need to sell it's soul to find a serious partner. In the medium term they might find a partner which invests in them but guarantee their identity. And BA shows no interest I only see LH.
 
Econojetter
Posts: 356
Joined: Thu May 24, 2001 11:24 pm

RE: Swiss And The Alliances

Mon Nov 22, 2004 12:14 am

When the membership was negotiated, LX was in a desperate financial position. The transfer of LHR slots to BA acted as some form of collateral for a loan guarantee. LX had very little choice but to agree to most of BA's conditions for it to be admitted into oneworld.

LX appears to be operating in the black lately but its strategic position has not changed. ZRH is surrounded by Star (FRA, MUC, VIE, CPH, WAW) and Skyteam (CDG, AMS, MXP, PRG) hubs. That was one consideration that nudged it towards oneworld. However, with BA betting on Terminal 5, it is not likely that ZRH will be allowed to become a major hub. The Northern and Central African region might be a niche, but there is also SN. ZRH is a little too far west to be much good for Eastern Europe.

What LX had was a lot of the ZRH/GVA (plus BRU during the Qualiflyer days) O&D premium traffic, and that would be what BA and LH are after. However, I suspect that LX's share has been eroded substantially by the advent of European alliance and LX's own operational difficulties. At this point, the big airlines may just be waiting to scavenge.
 
rtfm
Posts: 421
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RE: Swiss And The Alliances

Mon Nov 22, 2004 3:14 am

Econjetter: "At this point, the big airlines may just be waiting to scavenge." Yep - and Swissair/Swiss have few to blame but themselves.. And if anyone thinks that LH are going to ride to the rescue like some knight on a white charger in order to "guarantee their identity" as JoFMO alludes to, I think that they are dreaming. The Swiss (country) market is just not big enough (nor was it ever) to support a huge O&D system and ZRH is never going to be a major European hub. LH may well end up doing some sort of deal but the primary objective will not be to preserve Swiss' identity...
 
DeltaWings
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Joined: Fri Aug 13, 2004 4:06 am

RE: Swiss And The Alliances

Mon Nov 22, 2004 3:57 am

What ever happened to Qualiflyer Group? Wasn't Swissair in this Alliance, and does this Alliance still exist?

DeltaWings
Homer: Marge, it takes two to lie. One to lie and one to listen.
 
JoFMO
Posts: 1840
Joined: Wed Jul 14, 2004 1:55 am

RE: Swiss And The Alliances

Mon Nov 22, 2004 4:15 am

@DeltaWings:

Qualiflyer is dead and gone. LOT and TAP are in Star, Sabena is dead and reborn as Brussel Airlines which is heading to Oneworld.


@RTFM:

We would have to discuss what "guarantee their identity" means. Has Virgin Atlantic lost it's identity to SQ or KLM to AF?
From my point of view a 49% stakeholder and a guarantee for their brand is the most they can expect. And that is what LH has offered them the last time, but they refused and decidet to get BA's offer. We now know that it was the wrong decision for them. We have to wait if LH will offer them the same value again.
But LH would be stupid to destroy the SWISS brand. Their European network might be trimmed a little bit, but not too much. Some intercontinental routes would alos have to be stopped, but they already canceled so much in the past, that there isn't so much less.
I even think that Swiss could get some passengers back because of an strong partnership with LH. Over the last years Swiss has lost market share to the three big European alliances , but these passengers might want to come back if Swiss has the supportof an big partner, who ever that might be.
 
Econojetter
Posts: 356
Joined: Thu May 24, 2001 11:24 pm

RE: Swiss And The Alliances

Mon Nov 22, 2004 8:19 am

The issue here is autonomy rather than brand identity. I cannot recall the exact details of LH's offer to LX with regard to shareholding or representation on the board of directors. LX may well end up ceding operational control to LH while still retaining its SWISS corporate identity. That could also happen should LX finally go to BA.

The question is also how much is left of the loyalty to the SWISS brand. How much of that loyalty is directed towards SWISS itself and not courtesy of its relationships with e.g. AA? If there is enough premium customer base, could LH not back a launch of premium-only services by Privatair to select destinations from ZRH/GVA and codeshare on those services? If there isn't much left, why not allow market forces to pressure LX into continued downsizing thereby eliminating its presence from more markets?

The SQ-VS relationship is different in that they compete in different markets except now VS appears to have turned around to bite SQ by launching LHR-HKG-SYD; still, the overlap is still relatively minor. AF-KL is a more challenging combination and analysts are still split on the merits of that merger. In any case, the guarantee of autonomy and brand identity for KL is for a limited time (5 or 8 years or something like that) and KL was able to negotiate on the strength of the AMS hub; quite different from LX and ZRH.

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