Towards the end of last year, it seemed that stability was beginning to emerge from the global alliance groupings that had been rapidly coalescing. Last year saw major upheavals. Swissair split from Delta following the US major's tie-up with Air France and Austrian subsequently jumped ship, quitting its Alpine ally to join Lufthansa and United-led Star. But by year-end these changes had bedded in, while Air Canada's takeover of oneworld member Canadian Airlines on behalf of Star was also nearing completion.
From the viewpoint of early 2000, the future shape of the world airline industry seemed clear. There would be four major global groupings, namely Star and oneworld, plus the Delta-Air France axis, which was striving to recruit new members, and the "Wings" amalgam, poised to link European allies KLM and Alitalia with Northwest and perhaps Continental. Swissair was expected to plough its own furrow via Qualiflyer and its "single airline" project with Sabena, but was tipped by many observers to plump for one of the big four - probably British Airways and oneworld.
But then the unexpected happened: KLM called off its engagement to Alitalia, with the pair practically at the altar, and punched a hole through the notion that alliance forming had reached its endgame. Looking back on this once popular notion, Commerzbank analyst Chris Tarry remarks: "How wrong this view was". With the Wings project now seemingly dead in the water, Tarry believes the KLM decision will have "significant implications" for the industry, certainly in Europe, and probably globally.
It is hard to disagree with him. Both KLM and Alitalia will inevitably seek new allies and they should not be short of suitors. Ally-hungry Air France is likely to approach both, with Paris far enough from Milan for an Alitalia deal to work, and KLM able to deliver the French carrier's European aims. For Alitalia, Swissair is an option, although the proximity of Milan and Zürich would necessitate a "dual hub approach". BA could offer a similar deal to KLM, channelling transfer traffic through Schiphol and reserving Heathrow for plum point-to-point flights. The same model might work with Swissair and Sabena's Brussels hub.
The US dimension adds complications. KLM is closer to Northwest than is Alitalia, but that link could prove unacceptable to the US partners of potential European allies. Here a deal with Air France might present fewer problems to Delta than one with BA would to American. But then the BA-AA teaming is by no means written in stone-The prospect of alliance instability is greater now than ever.
Source: Flight International
