photo by Flazingo
Considering the ongoing battle between American and Gulf carriers, the fighting spirit of old school competition seems alive and well in the airline industry. But a new report by aviation analyst OAG shows that behind the scenes, there may be far more embracing than fist shaking going on, as new types of partnerships are beginning to crack (or find ways around) traditional alliances.
Some airlines, like Virgin Australia, JetBlue and Air Baltic, now see advantages in the flexibility and independence they get by staying outside of alliances with top carriers like Delta, United and American, which are are part of SkyTeam, Star Alliance and Oneworld, respectively. Etihad has taken this one step further by creating its own mini-alliance through equity investments in other airlines. The so-called Equity Partners include Aer Lingus, airberlin, and Virgin Australia, among others, and offer the one booking/one fare benefits of a traditional alliance.
Even airlines already members of the three major alliances are stepping outside the walls if a deal can be struck in their best interest. Korean Air, for example, a SkyTeam member, is now code-sharing with American Airlines, a member of the Oneworld alliance. Airlines are also buying stakes in others, including Qatar Airways, which is now the largest shareholder of IAG, the company that owns British Airways, thereby strengthening its ties to Europe. Etihad is also investing in airlines in Europe, India, and Australia, for example, as a new way to expand business on a global level.
For industry fortune tellers, the new model of partnership may give a glimpse of the future, although formal alliances aren’t going anywhere soon, and still retain tremendous power. Nonetheless, for rapidly expanding carriers in the Gulf, China, and elsewhere, who are hungry for more, a new path may be opening.