Topic Author
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Star Alliance Too Big?

Sun Jan 14, 2001 5:36 am

This topic is probably discussed before but I think it isn't bad to discuss it again is the Star alliance is growing rapidly.

I think the Star alliance is getting to big to be competitive. The effect will be get smaller for companies as more and more airlines are joining. OK the route network will be better but there are nasty side-effects, 2 Austrian companies are member this should be a sign that the effects of more profit will be smaller for these companies. I think if you want to compete you have to create a network of airlines with their own large territory. So that should be 1 airline for each region of the world (Europe, Pacifc, Far East, Middle East, Africa, South America, North America, East Europe&Former Soviet Union). If that is the case you have the highest change of profits while the route network should be almost as large.

British Midland, Lufthansa, Sas and Austrian have very much the same destinations to serve (not to mention all those other european members). If you travel with an alliance like the Star alliance this means you can choose which airline you want to fly with, the chance they pick out one particular airline is getting smaller so the profits should go down slowly.

If you look at KLM/NWA or Skyteam they have only a small number of airlines with almost the same destinations served. The chance for Air France to handle the European passengers is much higher than the chance British Midland will get those pasengers from the Star Alliance.

Well, I am curious about your opinion.
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Joined: Wed Jan 03, 2001 8:47 pm

RE: Star Alliance Too Big?

Sun Jan 14, 2001 10:30 pm

i agree, that star seems to be too big. but i don´t think that a number of airlines in a certain area has such a bad effect.
in europe, we´ve got lufthansa, SAS, british midland, and the austrian group. that might seem to much, but remember that every single airlines brings its on base of customers to the alliance so on star there are more travellers than on, let´s say, skyteam. that leads that more european travellers chos star because of more airlines being involved. i agree, that there should be a lower presence of french travellers on star, because of AF in skyteam, but from germany, austria and scandinavia most people should travel on star.
regarding other alliances such as skyteam or KLM/NW, as of today they don´t have many members but these alliances will grow in the future and so don´t think that skyteam will remain an alliance of just 4 airlines. and if you compare the star alliance network and the skyteam network, the star network is MUCH bigger.
let´s take a look again at star´s european network. there are 4 airlines, but only one big airline with a notable presence worldwide. it´s correct that LH, SK and BD, OS mainly serve the same destinations, but every airline has its strength. for example, the austrian group was chosen because of its experience and its excellent network in the eastern european countires. and i think one of the main reasons british midland was chosen is to have a foothold in london heathrow and to compete directly with british airways.

it´s actually a very interesting issue you brought up. i think there are so many big airlines in star, UA, LH, SQ, TG, AC, SK, and often i ask myself to what extend star could be expanded. sometimes we hear that star still lacks a significant presence in the near east, china and india, and i think as well in africa. but for closing these gaps they´d more airlines to join. air china has an agreement with lufthansa, and they stated they might look for joining star, but still consider northwest with which they enjoy great ties as well.
i´d love to see some more airlines join star but thinking of it gives me a headache. if they´re not careful, that could leave to trouble. i think singapore is an excellent airlines, but to me they seem to always want to be the king. and although bringing in singapore into the alliance enhanced star greatly, it also created clashes with thai. i think the more airlines join star, the more likely will become these clashes.
in addition, too many management boards mean too many different opinions, plans, directives too follow and every airline wants to follow its own best interest. that´s why i´m happy to see that air new zealand and ansett now have the same management board, so it´s one voice less to make happy. then austrian is seeking full management control of both tyrolean and lauda air and that would reduce the number boards as well.
rumour has it that emirates look for entering star. i´d love to see emirates become a member but they´d bnetter fit to skyteam, i think. in addition, it doesn´t seem that singapore and emirates seem to get along very well at the moment and both airlines seem to always want to be considered the "boss".
so if they decided to have an airline from the near east they should consider qatar airways, which lufthansa has good ties with. they serve the same important cities in the near east as emirates and have a good reputation. it would almost mean the same benefits as having emirates join but there wouldn´t be the risk of another major management board which wanted to pursue its own way.
and then they look at india. i hope they don´t chose air india, which singapore is interested in acquiring a stake in, because they don´t seem to be fit for an alliance. why not chose an airline like jet airways, which enjoys a good reputation, has excellent service and a notable network in india (unfortunately, it has somekind of agreement with BA).
i´d love to see SAA join star, because star needs a better presence in africa (onewolrd already enjoys a significant presence in africa because of BA´s services), but there´s still swissair which owns a stake in SAA.
well, who knows.
i hope they´re not taking up any other major carrier but complement the network with smaller airlines.
and they have to come up with some good ideas for being able to control so many management boards.

If only pure sweetness was offered, why's this bitter taste left in my mouth.
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RE: Star Alliance Too Big?

Sun Jan 14, 2001 10:39 pm

Star Alliance isn't too big. However, I can't see it expanding anywhere more but into the African and South American regions (is VARIG part of Star?)

But take this with a pinch of salt, some pepper and add Sirloin steak with red and green peppers.

Star Alliance has saved passengers loads of money (www.staralliance.com somewhere in the press section), also by some airlines filing for (I dunno how to put this. Freedom laws as in they can be trusted, something about not being in the anti trust law) some have saved pax even more money (and themselves I would think).

I would like to see a Russian Airline though
Anyone can fly, only the best Soar.
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Joined: Sun Dec 31, 2000 6:44 am


Sun Jan 14, 2001 10:43 pm

Yes, VARIG is a part of Star Alliance.

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