Breaking up is never easy - just ask Swissair and Austrian Airlines. The pair had been locked into a close relationship since 1990, but, last week, their love affair ended when Austrian packed its bags and walked out on the Qualiflyer group, having been won over by the rival charms of Lufthansa and the Star Alliance.
Already very public, the split seems set to become messy as Austrian tries to extricate itself from various long-term contracts to join Star with rather unseemly haste. The Vienna-based airline has also performed the industrial equivalent of walking out with the children, taking subsidiary carriers Tyrolean Airways and Lauda Air with it as full members of Star.
Although not unexpected, Austrian's defection is still startling in that it represents the first major split within a modern airline alliance grouping. But, although the break-up of Qualiflyer is the first such schism, it seems unlikely to be the last. During the few years in which the global alliance has emerged as an industry phenomenon, surprisingly little blood has been spilled, but, with the formation of rival groups now nearing an endgame, conflicts are breaking out as airlines jostle for position and alliances try to fill in the gaps in their global coverage.
For Swissair, which has been building up its alliance strategy since the formation of the Atlantic Excellence alliance in 1996, the writing was on the wall as soon as Delta Air Lines, its key partner in the grouping, opted to link up with Air France earlier this year.
Swissair had long hinted that it would be unable to join any group also containing the French flag carrier, and although its own relationship with Delta remains intact, the US giant's strategy seems certain to push the Zurich-based carrier in the direction of another group.
That reality in turn placed a question mark over the future of Qualiflyer, a peculiarly European structure which has never quite convinced as a genuine alliance player. Although Swissair fought to keep its Alpine ally within the group, attempting to buy up its shares - and with them management control - Austrian soon concluded that had it take control of its destiny and act in its own best interest.
And that, it decided, meant linking up with Star. To its subsequent embarrassment, SAir ran advertisements in the Austrian press under the headline 'We never want to part' on the very day the split was announced. Swissair says it will persevere with Qualiflyer, although it is hard to escape the conclusion that the group is now little more than its own extended family, held together as it is by equity investments.
The failure of Alcazar, an all-European alliance of the early 1990s, does not bode well for Qualiflyer. Swissair, KLM, Austrian and SAS overcame several hurdles to establish the venture, only for it to founder over the choice of a US partner
The other great alliance conflict has broken out over Canada's ailing airline industry. Flag carrier and Star Alliance member Air Canada initially sought to benefit from the weakness of rival and oneworld member Canadian Airlines by stripping it of lucrative long haul routes. But the tables were turned when American Airlines sprang a bid to secure both carriers for oneworld with the aid of the Onex investment group. The tug-of-war is yet to be resolved, and represents the first head-on clash between the two global heavyweights.
A third clash has afflicted the Star Alliance, with Air New Zealand, a relative newcomer to the group, finding itself fighting for control of Ansett Australia with potential Star recruit Singapore Airlines. SIA appears to have walked away from the clash - but, perhaps, as a consequence, has yet to commit to Star.
The path to global hegemony, then, is anything but smooth. What is not clear is whether the battles are growing pains to be overcome before alliances settle down, or are the shape of things to come. Equity investment would bring more stability, but may represent a higher price than most airlines are willing to pay. One thing is certain; without stability, the savings that would come with common alliance purchasing will remain a distant dream, and alliances will remain little more than glorified marketing tools.
Source: Flight International
