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debonair
Topic Author
Posts: 3741
Joined: Sat Jan 03, 2004 10:50 pm

Future of Star(*) Alliance?

Mon May 18, 2020 11:55 am

Hi to you all,

reading the latest news, it seems the *A is breaking apart.

First, ADRIA AIRWAYS left on the 2nd of October 2019 the alliance after bankruptcy, SAA is under bankruptcy protection, as well as Avianca Holdings S.A. (Chapter 11). THAI AIRWAYS will follow shortly (according to an article in the Bangkok Post) and the future of Air India isn't much brighter... Other members, like UNITED and Lufthansa Group are only surviving thanks to a state bailout.

So what's the future for *A? Which airlines are in position to fill the void left?
 
avek00
Posts: 3241
Joined: Mon Oct 25, 2004 5:56 am

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:02 pm

debonair wrote:
Hi to you all,

reading the latest news, it seems the *A is breaking apart.

First, ADRIA AIRWAYS left on the 2nd of October 2019 the alliance after bankruptcy, SAA is under bankruptcy protection, as well as Avianca Holdings S.A. (Chapter 11). THAI AIRWAYS will follow shortly (according to an article in the Bangkok Post) and the future of Air India isn't much brighter... Other members, like UNITED and Lufthansa Group are only surviving thanks to a state bailout.

So what's the future for *A? Which airlines are in position to fill the void left?


Let's not forget 2002-2005, during when every single Star Alliance member in the Americas sought bankruptcy. Varig didn't make it, but United, Air Canada, and US Airways all lived on and later expanded their networks. Star Alliance will be fine. In fact, membership in Star arguably has greater value now than ever before as a R&D risk-sharing platform for creating The Future of Air Travel.
Live life to the fullest.
 
johns624
Posts: 2567
Joined: Mon Jul 07, 2008 11:09 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:02 pm

Every alliance will have members filing for bankruptcy. If there is a demand, other carriers will provide the service.
 
davidjohnson6
Posts: 634
Joined: Mon Jun 20, 2016 10:10 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:03 pm

I don't think it's *A in particular that's breaking apart. Airlines have been going bankrupt for decades and they will continue to do so for the years to come. In the past both Varig (was the largest carrier in Brazil) and Ansett (equivalent of Virgin Australia) were in *A but they went bust. Adria was nice to have but frankly irrelevant to *A I don't think Air India will ever be allowed to go bankrupt. If United or Lufthansa cease operating, the world has much bigger problems than just *A
 
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Mortyman
Posts: 5811
Joined: Sat Aug 12, 2006 8:26 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:09 pm

It's not the first time that various airlines has left an alliance in a short period of time, so it's way to soon to tell. I think Star Alliance will work things out. You loose some, you gain some.
 
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Polot
Posts: 10365
Joined: Thu Jul 28, 2011 3:01 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:12 pm

All the alliances are relics anyways, becoming less important as airlines go for more and more JV’s instead. Covid-19 is not going to change that, in fact it will probably accelerate JV formations.
 
xiaotung
Posts: 1060
Joined: Fri Jan 06, 2006 7:58 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:28 pm

Multiple airlines within the alliance are going through re-organization. It doesn't mean they will cease to exist. Let's face it. Probably only South African is going under with some certainty. Even so there will be a new airline in its place which may or may not pursue Star membership. Adria had what around 10 aircraft. Air India's future will depend on who the new owner is. If the new owner is not an airline, I don't see them leave the alliance.
 
MIflyer12
Posts: 7348
Joined: Mon Feb 18, 2013 11:58 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 12:40 pm

debonair wrote:
Other members, like UNITED and Lufthansa Group are only surviving thanks to a state bailout.


Yes, but they will survive (along with Air India), and have long provided the bulk of destinations and available seat miles. Adria and SAA are so small as to be irrelevant.
 
airhansa
Posts: 228
Joined: Wed Jan 08, 2020 3:18 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:05 pm

MIflyer12 wrote:
debonair wrote:
Other members, like UNITED and Lufthansa Group are only surviving thanks to a state bailout.


Yes, but they will survive (along with Air India), and have long provided the bulk of destinations and available seat miles. Adria and SAA are so small as to be irrelevant.


Air India itself may not survive. The private sector is far superior in terms of product than the public sector, but the only thing keeping AI alive is jobs (even Lufthansa has a role to play as infrastructure provider, whereas India has alternative domestic airlines and regional airlines to provide said infrastructure).
 
avek00
Posts: 3241
Joined: Mon Oct 25, 2004 5:56 am

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:06 pm

Polot wrote:
All the alliances are relics anyways, becoming less important as airlines go for more and more JV’s instead. Covid-19 is not going to change that, in fact it will probably accelerate JV formations.


Neither JVs nor alliance memberships are relics. I'll go so far as to say the financial risks of Delta's recent JV strategy will serve as a cautionary tale for the rest of the industry. Global alliances facilitate all sorts of cooperation between airlines at much lower economic and commercial risk, and that is an advantage at a time when capital (read: cash) is king.
Live life to the fullest.
 
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Polot
Posts: 10365
Joined: Thu Jul 28, 2011 3:01 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:29 pm

avek00 wrote:
Polot wrote:
All the alliances are relics anyways, becoming less important as airlines go for more and more JV’s instead. Covid-19 is not going to change that, in fact it will probably accelerate JV formations.


Neither JVs nor alliance memberships are relics. I'll go so far as to say the financial risks of Delta's recent JV strategy will serve as a cautionary tale for the rest of the industry. Global alliances facilitate all sorts of cooperation between airlines at much lower economic and commercial risk, and that is an advantage at a time when capital (read: cash) is king.

Delta’s strategy went beyond JVs to equity purchases. This isn’t the first time that strategy has proven to be risky when times are bad, Swissair says hello.
 
DoctorVenkman
Posts: 182
Joined: Mon Mar 21, 2016 10:10 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:35 pm

Polot wrote:
All the alliances are relics anyways, becoming less important as airlines go for more and more JV’s instead. Covid-19 is not going to change that, in fact it will probably accelerate JV formations.


The alliances are very useful when traveling internationally from a tier-2 city since they open up so many options. A joint venture does not get me from ABQ to BAQ on a single ticket, or LAS to SPU, or DEN to HYD, etc. etc. Take my LAS-SPU trip for example, that would be only possible to do on BA without alliances, but with alliances you have tons of options and can stick with your preferred FF program. They are definitely a win for the consumer.
 
eurotrader85
Posts: 134
Joined: Wed Oct 24, 2018 8:45 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:44 pm

Thai going under would be a big blow being a founder member and all but as others have said, every airline is under pressure at the moment. If the two kingpins of the group LH and UA go under then its a different story for the group, and that's not likely to happen.

This said I had always wondered about the longevity of *A membership for some (in normal times), not because of airline bankruptcies, they happen, but because of the internal politics, the way the rules were changed so LH and UA basically dictate the show, and unlike OW, rules of membership are a lot more restrictive. Annoying if you are not making them and we know this annoyed the best airline in the group, SQ. Obviously there are politics between members in OW as well, but if you can do your own thing a bit more, doesn't matter so much and benefits outweigh costs. For some *A members, this probably wasn't so much the case. That said, in the present environment, nobody would be taking any rash decisions, sticking with the tried and tested.
 
A3501041
Posts: 6
Joined: Thu Dec 05, 2019 10:22 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 1:55 pm

What about new members? There are few airlines such as Azul and Philippine that would be a great increase in SA network. I can see AD very close to a membership as they are close ties with United, TAP, Copa and Avianca, even thought the latter is going bankruptcy, it’s still a SA member and I believe the airline will survive. Besides, Azul have codeshare with Turkish and Ethiopian as well as interline with Lufthansa. Most of their partners are Star Alliance members.
 
HNLSLCPDX
Posts: 68
Joined: Sun Nov 01, 2015 5:40 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 4:34 pm

To me, and I think as long as United, Lufthansa, ANA, Turkish, Singapore, Air China, Air Canada stay together then Star Alliance will be fine. They are the main airlines of the alliance and the bread and butter. If you group the airlines in the alliance they are probably at the big boy table. After that Air New Zealand, Air India, SWISS, and maybe Avianca, Copa, and Ethiopian are the next most important as far as coverage goes.
 
dtw2hyd
Posts: 8195
Joined: Wed Jan 09, 2013 12:11 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 4:52 pm

All three premium service alliances should merge into one, and allow LCCs as connecting partners.

Present alliances are outdated, with huge gaps in their own network coverage and JVs make them useless.

Other option is worldwide mandate to interline, i.e., any two airlines operate at any airport should allow passengers and their baggage to transfer.
All posts are just opinions.
 
davidjohnson6
Posts: 634
Joined: Mon Jun 20, 2016 10:10 pm

Re: Future of Star(*) Alliance?

Mon May 18, 2020 5:05 pm

Global monopolies are rarely a good thing...
 
bfitzflyer
Posts: 339
Joined: Mon Nov 07, 2016 1:02 am

Re: Future of Star(*) Alliance?

Wed May 20, 2020 12:52 am

I actually think it is possible that COVID might actually end up revitalizing alliances as no one is going to be able to keep the networks they had pre=covid.
 
xiaotung
Posts: 1060
Joined: Fri Jan 06, 2006 7:58 pm

Re: Future of Star(*) Alliance?

Wed May 20, 2020 1:20 pm

bfitzflyer wrote:
I actually think it is possible that COVID might actually end up revitalizing alliances as no one is going to be able to keep the networks they had pre=covid.


You are absolutely right. The whole airline industry will go back a few years to the pro alliance and pre JV era.

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