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Future of Star(*) Alliance?

Posted: Mon May 18, 2020 11:55 am
by debonair
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?

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:02 pm
by avek00
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:02 pm
by johns624
Every alliance will have members filing for bankruptcy. If there is a demand, other carriers will provide the service.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:03 pm
by davidjohnson6
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

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:09 pm
by Mortyman
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:12 pm
by Polot
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:28 pm
by xiaotung
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 12:40 pm
by MIflyer12
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:05 pm
by airhansa
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).

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:06 pm
by avek00
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:29 pm
by Polot
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:35 pm
by DoctorVenkman
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:44 pm
by eurotrader85
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 1:55 pm
by A3501041
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 4:34 pm
by HNLSLCPDX
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 4:52 pm
by dtw2hyd
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.

Re: Future of Star(*) Alliance?

Posted: Mon May 18, 2020 5:05 pm
by davidjohnson6
Global monopolies are rarely a good thing...

Re: Future of Star(*) Alliance?

Posted: Wed May 20, 2020 12:52 am
by bfitzflyer
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.

Re: Future of Star(*) Alliance?

Posted: Wed May 20, 2020 1:20 pm
by xiaotung
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.