The global airline alliances are jockeying for position as major new terminal projects offer fresh opportunities to co-locate at hubs such as London Heathrow
The global airline groupings have long talked about the potential benefits to be had on the ground from presenting a united front at the world's major hubs. Star Alliance has so far led the way, gradually pushing ahead with plans to bring its members under the same terminal roof at a range of target airports - including those where none of its members dominate. But oneworld and SkyTeam are also making moves, spurred by the opportunities to be had from the opening of new facilities, not least, at London Heathrow.
The long-awaited Terminal 5 at Heathrow was long ago allocated to British Airways. Its transfer to Terminal 5 in 2008 starts a domino effect of carrier moves around the hub. BA says its oneworld partner Qantas will have the remaining space, with other oneworld carriers moving into Terminal 3 alongside Virgin Atlantic and unaligned long-haul carriers. Virgin has elected to remain in Terminal 3 rather than move alongside its major shareholder and codeshare partner Singapore Airlines when it moves with Star to Terminal 1.
Terminal 4 will be allocated to Air France-KLM and its SkyTeam partners, which have a smaller presence at the hub. Its three US members - Delta Air Lines, Continental and Northwest Airlines - are unable to fly there and CSA Czech Airlines passengers already check in at Air France desks at its current Terminal 2 base. A move to Terminal 4, where KLM is already resident, is a logical step, while Terminal 2 will house unaligned short-haul carriers.
The major alliance relocation issue at Heathrow has been the position of Star. In mid-year it stepped up its pressure on Heathrow operator BAA to offer a better deal on the transition to a new terminal. It was unhappy with the perceived competitive advantage BA would win by being housed in a brand-new terminal while it got an outdated facility.
Heathrow handshake
According to Tim Bye, deputy chief executive of Star member bmi, the two sides have verbally agreed a deal that will see Star move completely into Terminal 1. Crucially for Star, BAA has agreed to accelerate work to improve the facility towards Terminal 5 quality standards ready for the transfer in 2008, says Bye. The original proposal was for this work to occur between 2008 and 2011.
"We are looking for some work to be carried out between next year and 2008, then continuing beyond this time as it won't by any means be finished by then," says Bye. BAA will have to pay for this advanced work schedule from its existing capital budget.
"There has been a coming together of minds in the last four months," says Bye. "This is not necessarily the ideal programme, but we are broadly happier with the situation." The bulk of Star carriers at Heathrow will move to Terminal 1 in 2008. A memorandum of understanding between BAA and Star on Heathrow should be signed at the alliance's chief executive meeting in December, says Bye.
A similar alliance location dispute has come to the boil in Madrid. Spanish airport operator Aena has reversed a decision taken in June 2003 under a previous government to install Spanair, Spain's second-largest carrier and member of Star in the new Terminal 4 at Madrid Barajas. Under the reversed allocation, Spanair and Star partners will now move to Terminal 1 and part of Terminal 2, while oneworld's Iberia and its partners will occupy the new terminal.
Spanair insists the allocation of Terminal 4 to Iberia and oneworld would contravene principles of free competition and is to appeal to national and European authorities against the decision.
The new Bangkok Suvarnabhumi airport, home to Star member Thai Airways, is another opportunity for the alliances to start from scratch and have input into terminal design so that their members are placed in the most convenient locations. Oneworld, for instance, says it is examining how best to co-locate its member carriers that fly there.
However, plans are still at an early stage because there is doubt over the airport's opening date. It is due to open next September, but IATA is sceptical about the prospect of this deadline being met, claiming that its opening will have to be pushed back by at least two years. Its operator, the Airports Authority of Thailand, however, denies there have been construction delays.
The captive oneworld grouping is looking at the Heathrow and Madrid reshuffles as a great opportunity to have some input into the design of the lounges and joint offerings in what will be in effect a blank canvas. The ambition is to have a single check-in area at Heathrow Terminal 3 for resident oneworld carriers and there are plans to extend the premium kerbside check-in facility already offered by American Airlines to other members, according to Robert Antoniuq, director customer experience and airports at oneworld. Members currently share facilities at more than 25 airports worldwide.
Star under one roof
Star is enthusiastically rolling on with its Move under one roof concept to airports served by a number of its members. "It is more than a question of physical co-location, it is the whole philosophy of sharing processes," says Lee Hock Lye, vice-president products and services at Star. To date, the concept is in operation at nine major hubs.
Apart from its plans at Heathrow, Madrid and Bangkok, Star aims to gather its members together in a range of other hubs: they will move into Miami International's new concourse J by 2006; Paris Charles de Gaulle T1 will be an exclusive Star terminal by 2009; members will be housed under a single roof when Japan's Nagoya airport opens in February 2005; Tokyo Narita's renovated Terminal 1 will house all Star services by 2006; Star is working to develop a masterplan for Los Angeles; and the co-location concept will be implemented in Warsaw's renovated terminals by 2007.
The concept is intended to include common service facilities offering a one-stop shop for baggage. The sixth such facility has just opened at Washington Dulles airport, following Budapest, Munich, Paris CDG, Vienna and Zurich. Shared self-service check-ins are currently on trial and a decision where to roll them out will be finalised soon. The alliance is also moving towards opening lounges operated and branded under the Star banner. There is one in place at Zurich so far - and Los Angeles and Nagoya will be next.
Another service that particularly links customer service with cost savings is the connection team idea. Aimed at passengers with tight connections between Star flights, teams meet the incoming flight, liaise with the outgoing service and ensure that passenger and baggage make the connection. This service is up and running in Chicago O'Hare, Frankfurt and Los Angeles and savings so far this year amount to €2.5 million ($3.3 million).
SkyTeam is also working hard on its customers' behalf while at the same time looking to achieve cost savings through economies of scale. "Improving the airport experience is the most important aspect for the future," says BenoŒt Guizard, vice-president of alliance marketing at SkyTeam. Through check-in is available on all connecting flights operated by alliance members apart from those where the connection takes place in the USA, where for security reasons it is necessary to reunite passengers in transit with their baggage to pass through the checkpoints.
Flagship Paris terminal
A flagship facility for SkyTeam was Terminal 2E at Paris CDG airport, which opened in July 2003 and was dedicated to alliance members. Part of the terminal structure collapsed in May, however, killing six people, and the terminal is still not back up to full operating capacity. There are currently just six daily Air France flights leaving the terminal, compared with around 100 operated by Air France and its SkyTeam partners before the accident. Two inquiries are under way into the accident and the worst case scenario could mean demolishing and rebuilding the terminal, according to airport operator Aéroports de Paris.
All SkyTeam members provide services for other member carriers at their bases. For example, Delta provides assistance to fellow airlines at Atlanta, Korean Air at Seoul and Alitalia in Rome. Numerous insourcing arrangements have been implemented in ground handling too.
The alliance is introducing common back-office facilities as well as those that are more visible to travellers. The SkyTeam support desk is designed to assist agents booking across all member carriers and one airport ticket office will be able to access the booking record of any customer flying within the alliance.
All the alliances stress that decisions to rearrange their airport operations in order to share facilities are not always easy ones. Often there are long-standing space leasing arrangements in place that have to be taken into consideration.
REPORT BY JACKIE THOMPSON IN LONDON
Source: Airline Business
