Alliances

In light of American Airlines bankruptcy filing and its status as a founding member of Oneworld, I thought about alliances in general and wondered if Oneworld isn’t in real trouble at this point. 

American Airlines won’t be engaging in any serious growth or aggressive strategies for some time to come now.  Every real move they make will be under the scrutiny of bankruptcy stakeholders and their attention will be focused on re-scaling the airline to fit the new realities for success. 

To me, that means that AA won’t have much to offer its partners in Oneworld.  It doesn’t mean they won’t benefit from AA but it does mean that working in concert with these partners to achieve a more aggressive growth for the alliance is probably off the table for now.

Furthermore, QANTAS isn’t exactly shining with success these days either.  They cannot use their A380s as they want and they have as serious labor problems as American Airlines does.   More and more, QANTAS seems at real risk to serious competition from both within Australia as well in the South Pacific/South Asia markets.  I’ll point out that QANTAS is also a founding member of Oneworld.

So, two of the Big 3 in Oneworld are currently hampered by their problems.  That’s kind of serious, I would think.  How does one make a strong business case to LANTAM for their alliance when that situation exists today?

In the meantime, SkyTeam and Star Alliance are racking up new partners and, more importantly, they are planning strong growth with a strategy that continues to seem far more coherent than Oneworld.  They question I ask is this:  Is there some scenario under which existing Oneworld partners start scattering to other alliances?  If one bolts, will others follow?

I don’t see British Airways / Iberia leaving anytime soon but what about the lesser partners such as Cathay Pacific or JAL or LAN says “Buh Bye”?  I think we would see several others looking for new relationships.  (It’s notable that Oneworld is so clueless as to still have Mexicana’s name on their website.)

The other scenario is that both Oneworld and other alliance partners separate and form a new alliance that displaces Oneworld.  More possible than one might think since Star and SkyTeam are clear dominated by just a handful of airlines.   Some partners in those alliances may be chafing to play a bigger role in an alliance and with enough world partners, creating a new alliance may well be not only possible but smart.

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