TWA85
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Joined: Tue Feb 14, 2012 10:06 pm

Oneworld, Skyteam, Star Alliance JV Question

Tue Jul 17, 2012 10:08 pm

Hi everbody,

How are the Oneworld, Skyteam and Star Alliances Trans-Atlantic joint ventures structured? Other than sharing revenue, and co-ordinating schedules, pricing and marketing, do they share operating costs in the same mannor and how are the revenues (and operating costs distributed)? What sperates these joint ventures from ordinary code share aggrements? Also do these joint ventures truley operate as one airline for each respective alliance or are they more of a group of airlines working together to acheive a common goal? Thank you for your responces in advance.
 
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Richard28
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RE: Oneworld, Skyteam, Star Alliance JV Question

Wed Jul 18, 2012 7:57 am

i'm sure someone else can add better detail... I'll try my best...

a codeshare is where one operator sells a ticket on another airlines metal, and takes a profit margin on the individual ticket sold.

a joint venture is where airlines combine all marketing and operating costs, plus the ticket revenue, and share both these costs and all the profits between them

note that joint ventures are not operated under all flights under an alliance, instead they are typically between two airlines within an alliance on designated routes. (e.g. IAG/ AA on all transatlantic flights between the US and the UK and US and Spain).
 
LOWS
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RE: Oneworld, Skyteam, Star Alliance JV Question

Wed Jul 18, 2012 10:55 am

Quoting Richard28 (Reply 1):
note that joint ventures are not operated under all flights under an alliance, instead they are typically between two airlines within an alliance on designated routes. (e.g. IAG/ AA on all transatlantic flights between the US and the UK and US and Spain).

No. Star Alliance Atlantic Plus-Plus includes AC, OS, LH, LO, SK, SN, LX and TP. Why not US is beyond me.
 
vv701
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RE: Oneworld, Skyteam, Star Alliance JV Question

Wed Jul 18, 2012 1:41 pm

The joint ventures are airline and geographic area specific and not alliance specific.

Hence, for example, the Anti-Trust Immunity between BA and JL for flights between Japan and the EU will exclude oneworlkd partners CX (who operate Japan-Hong Kong-EU) and AA (who operate Japan-USA-EU).

Similarly the ATI granted to AA, AY, BA, IB and RJ covers flights by these airlines, but not any other oneworld partners, between the EEA (EU, Switzerland and Norway) and North America (the USA, Canada and Mexico). Hence it does not include AB who, of course, are now a oneworld member and operate directly between Germany and both the USA and Canada. Indeed it has been reported since the investment of EY in AB that they would be seeking ATI (even though EY is not a oneworld member). However I cannot recall any mention of the geographic area for which they were planning to seek such immunity. I assume would be between Germany, the EU or the EEA and Abu Dhabi, the United Arab Emirates or the Gulf Cooperation Council Area.

As far as the detailed arrangements of the JV's are concerned this would be down to the individual airlines to decide between themselves but within the constraints of the immunity granted to them by the competition authorities. The only thing I can add here are the comments made by then BA CEO, Willie Walsh, at a British Airways investors' meeting in London in May 2010.

Walsh pointed out that the BA-QF Joint Services Agreement had been in force since 1995. It covers BA and QF operations between Australia and Europe, Australia and Asia and Asia and Europe. It provides for both revenues and costs on these routes to be shared. Walsh said that the BA experience of operating this BA-QF JSA was relevant to the then recently granted but not then implemented North Atlantic ATI. He said that this experience would ensure that North Atlantic ATI would be quickly and efficiently implemented. This suggests that the BA/QF JSA and AA/AY/.BA/IB/RJ North Atlantic ATI are operationally very similar if not (other than from a geographic perspective) identical.
 
lhcvg
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RE: Oneworld, Skyteam, Star Alliance JV Question

Wed Jul 18, 2012 2:28 pm

As far as revenue and profits, I believe it's split down the middle, which is why you see talk on here and FT about it not mattering who flies a given route (e.g., DL on ORD-CDG, AF only on JFK-CDG, etc.). By pooling all the revenue from covered service, they eliminate most barriers to right-sizing routes and don't have to worry about capturing that revenue - LH still gets half of what UA rakes in on IAD-GVA and IAD-ZRH, while UA gets it's share of the take when LH flies ATL-Germany (I forget whether it's FRA or MUC). It also eliminates the "battle of NY" issue that DL and CO ran into when both were in SkyTeam and tried to operate their competing hubs a few miles away from each other -- what's sauce for the goose is sauce for the gander when you throw everything in the pot together.

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