Every major airline group in the world is wooing Cathay Pacific to join its alliance. And Cathay admits that the time has come to end its long-standing aloofness and join ranks with other carriers.
Cathay has been talking to all the major groups. It will not say in which direction it is leaning, but discussions are intense and a decision seems imminent.
The slump in Cathay's traffic has added an element of urgency to the situation. 'We would like to proceed as quickly as possible to respond to the market situation,' says a spokesman. The pace of discussions picked up in February after Japan Airlines announced its codeshare alliance with American Airlines, and JAL joined the talks already taking place between Cathay, British Airways, and American.
Insiders cite several reasons why the BA/AA/JAL alliance is a better match than any other for Cathay. One of Cathay's best routes is its two daily flights to London/Heathrow. An alliance would allow Cathay and BA to feed each other with traffic at BA's hub.
Going east, the Hong Kong-Japan route has historically generated 22 per cent of Cathay's revenue. That has dropped recently, but observers see it as a temporary lull. Again, insiders claim that feeding traffic to and from JAL at its Tokyo hub would benefit Cathay.
For the US, the sources claim American would give Cathay access to more internal cities than Northwest because of its larger domestic network. Cathay and American already have a track record together from codesharing on Hong Kong-Los Angeles.
Summing up the advantages of BA/AA/JAL for Cathay, one insider says, 'the synergies are greater there. Commercially it would just make more sense.'
Conversely, these same observers do not think the KLM/Northwest alliance offers as good a match on routes, hubs, or capacity. Similarly, they rule out the Star alliance, considered to have reached saturation in southeast Asia, with Thai Airways already a member and Singapore Airlines likely to join.
The alliance dance continues elsewhere in Asia. An SAS spokesman leaked word that SAS was in the early stages of alliance discussions with All Nippon Airways. Since SAS is a Star member, this is fuelling speculation that ANA's recent codeshares with United Airlines and Lufthansa foreshadow ANA joining Star. ANA's prompt denial of any 'network' talks with SAS has not quelled such speculation. ANA insists it will seek market-specific alliances without regard to any global scheme.
Finally, American Airlines continues to seek Asian partners. It has signed an agreement to codeshare with China Eastern Airlines between, behind, and beyond their respective gateways in Beijing, Shanghai, San Francisco, and Los Angeles.
Source: Airline Business
