The largest association of airlines Star Alliance is 25 years old

Star Alliance is 25 years old

Things have changed a lot in the past quarter of a century. However, all five original members are still members of the Star Alliance. And most of those who joined later. The exceptions were Ansett Australia or the Brazilian Varig — they were either acquired or they went bankrupt. 

When Lufthansa, United Airlines, Air Canada, Thai Airways and SAS joined together to create a global alliance, they laid the foundation for competition and division of the world — all major airlines now had to decide on membership. 

     

Star Alliance, the largest airline association, is 25 years

Star Alliance is 25 years old

A second alliance emerged in 1999 around a pre-existing partnership between British Airways and American Airlines, when Cathay Pacific, Qantas and Canadian Airlines International — today Air Canada — teamed up to create Oneworld

Air France, Delta Air Lines, Aeroméxico and Korean Air followed suit in 2000 with the creation of SkyTeam .

Star Alliance is 25 years old

   

In the 1980s and early 1990s, airlines in Europe and the US saw strategic partnerships as a way to scale up and find a way around the strict regulations of different countries that were holding back their international growth. At this time, the global economy was already becoming increasingly interconnected.

The European Quality Alliance was formed in the 1980s by the flag carriers of several small European countries and included Swissair, Austrian Airlines, SAS and Finnair.

< p>This was followed in 1993 by the more ambitious project Alcazar. This time, Swissair, Austrian Airlines, KLM and SAS tried unsuccessfully to form a truly pan-European air group called Symphony. Many experiments took place in the 1990s, including numerous cases of airlines cross-purchasing each other's shares.

As an unfortunate example of such “games” you can bring Swissair. In the 1990s and before its financial collapse, Swissair had a three-way partnership with Delta and Singapore Airlines and even tried to form its own alliance called Qualiflyer along with Austrian Airlines and other carriers it invested in, such as Belgium's Sabena.

Star Alliance evolved from an “alliance of five” into the current association with 26 members. SkyTeam, currently the second largest alliance in the world, has 18 companies, and Oneworld — 14. These figures will almost certainly increase soon as a number of airlines negotiate to join.

Alliances have a number of advantages over loners. Their members offer flights to thousands of destinations around the world, as well as the ability to earn and spend frequent flyer miles, enjoy other benefits — lounges through a huge shared network that they could never replicate on their own.

Initially, the main purpose of the alliances was only to expand the customer base, increase their loyalty and quality of service. Only in the last few years has there been an increasing focus on digital transformation and technology.

Thus, SkyTeam is investing in a common technology platform that facilitates the exchange of data among all its members. The goal is to automate a seamless multi-airline experience including booking, check-in, lounge access and other aspects of the customer journey.

The three major alliances have invested in developing their brands and even created several branded products such as alliance-branded credit cards.

In today's aviation industry, there are a number of powerful independent players that control the market share of alliances. These include most low-cost carriers as well as some major full-service airlines such as Emirates that have made a conscious decision to remain independent.

Alliances, by the way, have proven to be flexible enough to allow members to negotiate deals on their own with non-aligned airlines and even with members of competing alliances.

This can happen when an airline needs to serve a particular market, but within its own alliance no suitable options.

Experts estimate that the combined market share of the three major alliances has fallen below 50 percent in 2021, compared to over 55 percent in 2018.

However, airlines still seek to join alliances, that is, alliances have retained their attractiveness. So, in recent years, Oneworld has signed contracts with Royal Air Maroc and Alaska Airlines and is preparing to accept Oman Air.

It is significant that Qatar Airways hesitated for a long time and did not enter into any alliance, and today its CEO Akbar Al Baker is the chairman of Oneworld.

At the moment, there is no Russian airline that is part of the global global alliance of passenger carriers.

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