questions
Topic Author
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Alliances: To What Degree Are Airlines Locked In?

Sun Mar 18, 2012 8:54 pm

While reading all the speculation about AA merger partners I began to wonder to what degree are airlines locked into their respective alliance. Said another way, what determines ease of entry/exit and are some members in a better position to walk away than others, and why?

For example, some have speculated that AA and US could merge. If this were to happen, US would walk away from Star Alliance and join oneworld. CO did something similar by leaving Sky Team and joining Star Alliance.

1. To what degree do anti-trust immunity agreements lock airlines into an alliance for a longer period of time? For example, what if Delta wanted to leave Sky Team and join oneworld?

2. Is it easier for smaller airlines to jump from one alliance to another? For example, what if AY wanted to leave oneworld for Sky Team?

3. As the industry consolidates, not just within the US, what impact do alliances have on potential merger partners?

PLEASE NOTE:
This thread is about the ease and impact of airlines moving from one alliance to another. The examples above are for illustrative purposes only.
 
LOWS
Posts: 1194
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RE: Alliances: To What Degree Are Airlines Locked In?

Mon Mar 19, 2012 11:04 am

Well, as I recall, there are significant financial disincentives for leaving an alliance (e.g. termination fees) not to mention the IT costs, marketing costs (AirXXX is now part of the Star Alliance, or whatever).

IT costs, such as integrating the airlines existing system with those of its new partners.

New routing options (e.g. from ATL-AMS-VIE to ATL-FRA-VIE)

New Codeshares and interlines

and the biggest one of all...

New FFP procedures, rules and reward levels 


Those are just the ones I can think of off the top of my head.
 
blink182
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Joined: Mon Oct 18, 1999 3:09 am

RE: Alliances: To What Degree Are Airlines Locked In?

Mon Mar 19, 2012 1:13 pm

I could be mistaken, but aren't there contractual exit and termination fees between airlines and their respective alliances?

Point being, I think its a lot more expensive than buying a bunch of stickers, signs, and lapels for airplanes, airports, and crew, respectively.
Give me a break, I created this username when I was a kid...
 
jfk777
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RE: Alliances: To What Degree Are Airlines Locked In?

Mon Mar 19, 2012 1:30 pm

Quoting questions (Thread starter):
While reading all the speculation about AA merger partners I began to wonder to what degree are airlines locked into their respective alliance. Said another way, what determines ease of entry/exit and are some members in a better position to walk away than others, and why?

For example, some have speculated that AA and US could merge. If this were to happen, US would walk away from Star Alliance and join oneworld. CO did something similar by leaving Sky Team and joining Star Alliance.

Usairways is NOT part of the Star Atlantic JV with UA, LH, SAS and AC. US should ave it easy transferring to OW with AA. IF AA and US do merge there just is no way for them to stay in Star, three would really be a crowd. The real prize here is the Charlotte hub. The internatioal expansion possibilities to Latin America are limitless with AA existing JFK and MIA gateways. CLT to EZE, GRU, LIM and SCL along with US current GIG flights would be reality.
 
delta2ual
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Joined: Mon Dec 03, 2007 11:18 pm

RE: Alliances: To What Degree Are Airlines Locked In?

Tue Mar 20, 2012 3:48 pm

Quoting blink182 (Reply 2):
I could be mistaken, but aren't there contractual exit and termination fees between airlines and their respective alliances?

I seem to recall reading or hearing that Star has the most restrictive contracts concerning leaving the alliance. Or maybe it was a-net heresay? LOL
From the world's largest airline-to the world's largest airline. Delta2ual
 
lhr380
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Joined: Thu Jan 15, 2009 5:39 pm

RE: Alliances: To What Degree Are Airlines Locked In?

Tue Mar 20, 2012 3:56 pm

Quoting jfk777 (Reply 3):

How come US is not part of the JV?
(The views on this site are my own and no one elses)
 
jasoncrh
Posts: 352
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RE: Alliances: To What Degree Are Airlines Locked In?

Tue Mar 20, 2012 4:01 pm

The other airlines dont want US in the JV. Also, they probably wouldnt get the necessary permissions from the government to be part of it.

Quoting lhr380 (Reply 5):
Quoting lhr380 (Reply 5):
How come US is not part of the JV?
 
LOWS
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Joined: Sun Oct 23, 2011 5:37 am

RE: Alliances: To What Degree Are Airlines Locked In?

Tue Mar 20, 2012 4:09 pm

Quoting lhr380 (Reply 5):
How come US is not part of the JV?

I think it had something to do with with the lack of volume of US flights TATL.

Quote:
The transatlantic joint venture among US Airways’ Star partners United, Lufthansa and Air Canada “is something that hopefully over time we will be able to work our way into, which will just make things better”, Parker says. “But we are happy where we are right now, in a strong alliance that serves our customers and the airline really well.”

-Doug Parker
http://www.flightglobal.com/page/interviews/doug-parker/the-interview/
 
lhr380
Posts: 2453
Joined: Thu Jan 15, 2009 5:39 pm

RE: Alliances: To What Degree Are Airlines Locked In?

Tue Mar 20, 2012 4:24 pm

Quoting LOWS (Reply 7):

Thanks for the link, will have a read.
(The views on this site are my own and no one elses)
 
questions
Topic Author
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RE: Alliances: To What Degree Are Airlines Locked In?

Wed Mar 21, 2012 2:42 am

Interesting that this was posted today:

Rumor-Delta Considering Leaving Skyteam! (by d93 Mar 20 2012 in Civil Aviation)
 
LOWS
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RE: Alliances: To What Degree Are Airlines Locked In?

Wed Mar 21, 2012 3:06 am

Quoting questions (Reply 9):
Rumor-Delta Considering Leaving Skyteam! (by d93 Mar 20 2012 in Civil Aviation)

Yes, but that will never happen.