It hasn’t been front page news, certainly compared to the wayward Northwest-Delta pilots, but Continental is dropping their partnership with Delta and Skyteam. They have joined with United and USAir in the Star Alliance. Now, the ramifications of that change are becoming a frequent flier reality.
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The long-sought antitrust immunity between British Airways, American Airlines and Iberia for their OneWorld alliance has hit another patch of turbulence with the E.U. as they attempt to gain the same interoperability enjoyed by competing Star Alliance and SkyTeam.
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A few reports of American Airlines (AA) and Delta Air Lines (DL) discussing possible investments in Japan Air Lines (JAL) have been making their way into the travel news cycles. Normally small investments by one airline into another might be par for the course, but in this case there are big airline alliance ramifications.
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In one of the most astounding comments by one airline about another recently, Delta officials are quoted in the Wall Street Journal as registering opposition to the proposed Lufthansa/JetBlue code-sharing agreement. They have noted the possibility of “competitive mischief” if the deal goes through.
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I’m back to my theme of unintended consequences. While the Transportation Department has been approving airline alliances and pursuing a U.S.-E.U. Open Skies agreement, the airlines have been figuring out ways to game the system. Now a pilot union that once supported all these efforts has awakened to a new reality they don’t like.
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Star Alliance CEO Jaan Albrecht announced that more airlines than ever want to become members of alliances. The reason: economics. Alliances now have the power to bargain with suppliers as a monolithic entity. They are wielding that power.
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Lufthansa, already with control of Swiss International, is completing its final paperwork to take over Austrian Airlines. This economic conquest will finish a consolidation that has never been achieved politically. The national airlines of all German-speaking countries will be under the same umbrella.
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Many readers have commented that they are pleased with alliances because of the sharing of frequent flier miles, lounges and connections. However, beneath that façade bigger problems are brewing.
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Continental Airlines will find out this week whether they will be allowed to join the Star Alliance at the end of May. The betting is that DOT will issue the go-ahead during the Congressional spring recess to avoid criticism from opponents.
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The Oneworld alliance has gained the support of California’s Governor Arnold Schwarzenegger in its application for antitrust immunity status, or ATI. But has the Governator seen this issue from the travelers’ side?
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