With British Airways and American Airlines having confirmed their move to counter the Star Alliance - with the five-airline "oneworld" alliance - attention is now turning to potential responses by major airlines which have not yet committed to one of the global blocks.
The oneworld link, formally unveiled in London on 21 September, will initially be little more than a joint marketing/code-share tie-up around a single brand identity involving American, BA and existing partners Canadian Airlines and Qantas, along with Hong Kong's Cathay Pacific (Flight International, 23-29 September).
The new group's longer-term ambitions will become clearer once approvals are received from both sides of the Atlantic for the American/BA alliance, expected before the end of the year. European Union (EU) competition commissioner Karel Van Miert has already warned that he will be examining the consequences of the new alliance for EU consumers.
The next batch of contenders for oneworld have already confirmed their intentions to join, including Iberia (in which American and BA each plan to take a 5% stake) and Finnair. BA confirms that all of its franchise partners will be included, but not its low-fare subsidiary Go.
Dragonair, part owned by Cathay, is expected to join "-but will need to complete various tasks, such as the setting up of a frequent flier programme", says Cathay chief executive David Turnbull. This will take "at least a year".
The incorporation of Dragonair, in which China National Airlines has the largest minority shareholding, would provide oneworld with an important link to mainland China. "To get into the Chinese market, you really need to link with a domestic carrier," says Turnbull, who confirms that potential Chinese partners have already been identified.
For oneworld, there are gaps to plug in Africa, Latin America and South-East Asia. Uncertainty surrounds Thai's continued presence in Star, particularly if BA manages to overcome a rival bid from Singapore Airlines (SIA)/Lufthansa and take an equity stake in the carrier. BA is vying with SIA/Lufthansa for a shareholding in South African Airways, while it is also looking to build upon its recent co-operation with Nigeria Airways. Aerolineas Argentinas and LanChile, which have ties with American, will plug oneworld's Latin American gap.
Mercedes Mostajo, principal at analyst BoozÑAllen & Hamilton, says that she sees up to five major alliances emerging initially, grouped around Star, oneworld, a Delta Air Lines/Swissair grouping, Continental Airlines/Air France and KLM/Northwest Airlines/ Alitalia, although the last two could be linked if Northwest completes its expected acquisition of a stake in Continental. "Five or six clusters are going to be too many. The chances are that only two or three are going to be viable and the biggest will prevail," she says.
Interest is focused on Japanese carriers, Air France, China and Swissair. Japan Airlines, with its links to American, was expected to commit to oneworld, but appears to have adopted a "wait and see" approach, as rival All Nippon Airways debates becoming a Star member.
Swissair appears to have the strongest links with oneworld, through its code-shares with Cathay and Qantas, and some unconfirmed reports suggest talks are under way. A link with the Swiss airline would bring with it Austrian Airlines and Sabena. Air France has so far sat on the fence, but is linked with Continental and is a potential partner for KLM/ Northwest.
Source: Flight International
