How much does the Middle East alliance shake-up matter?


Yesterday was apparently THE day to make news if you’re running an airline and looking to change the face of the global alliances. The oft-suspected (and occasionally flatly denied by the CEO) joining of Qatar Airways into the oneworld alliance was the major news that everyone expected. The ascension of Qatar into the alliance is expected to take 12-18 months and British Airways – recently a loser in the Qantas/Emirates deal – will be the sponsoring carrier for Qatar.

Not quite as expected was the announcement from Etihad and AirFrance/KLM that they were going to be building out a major code-sharing arrangement. Not only that, but Air Berlin – ~30% owned by Etihad – is also getting in on the deal. Air Berlin is also a oneworld member and Air France/KLM represents a huge chunk of the SkyTeam group. Or, to quote Doctor Peter Venkman, "dogs and cats living together… mass hysteria!" Okay, maybe not mass hysteria, but the move does represent the largest codeshare agreement between two alliance members from different alliances that I’m aware of.

And, let us not forget that Emirates may have started this whole thing rolling when they made the deal with Qantas, getting the latter to dump British Airways as their partner on the Kangaroo routes. It shouldn’t come as much of a surprise that analysts are saying that deal was the catalyst for the final push from BA to get Qatar to join up.

So, does Air Berlin now have to leave oneworld? Does Qantas? And does it make sense for either of them to? No, no and no.

For the past 15 years the alliances have been presenting themselves as the only logical way to build a network offering global coverage without actually flying to all the destinations. And there is certainly value in these alliances. But they aren’t the only option.

Several carriers have done reasonably well playing as "partner to everyone" rather than choosing just one pool of partners. The logistics might be a bit more difficult – more different systems rather than a single interface into the alliance definitely is – but that doesn’t mean it cannot be done. And the alliance members still have their bilateral relationships where necessary.

The real value for the airlines likely lies in the anti-trust immune operations. These tend to follow alliance lines but they aren’t exclusively so. And just being part of an alliance doesn’t guarantee participation. In other words, the real money comes not from the alliance but from having the right partners and government approvals.

The alliances are nice marketing arrangements for the airlines. And when they are operating smoothly there are even occasional benefits to the passengers. But the "shake-up" from the big three in the Middle East isn’t going to upset those alliances. At least not yet. Maybe they’ve got a few tricks still up their sleeves.

Related Posts:

Never miss another post: Sign up for email alerts and get only the content you want direct to your inbox.


Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

8 Comments

  1. I’m not sure that I agree. For example, does Qantas route its traffic to Emirates or Qatar?

    1. They can route to both. Remember that the alliances are marketing agreements. If they get a better revenue sharing deal with one than the other they can leverage that. And if a BA customer wants to fly BA/EY/QF they can. An AS customer can fly AS/EK/QF. Everyone is happy.

  2. I agree. The alliances are great marketing arrangements for the airlines but as soon as it is being operated smoothly and you are right, the big shake up will not upset them. By the way, what are your best airlines? Any recommendations for Asia?

  3. So if A/F is hooking up with Etihad and A/F is already sleeping with Delta does that mean those of us with SkyMiles will have access to Etihad rewards (via the A/F codeshare)?

    1. As a general rule code-share flights aren’t redeemable for awards. I wouldn’t expect this latest agreement to change that.

      Regarding favorite airlines, I don’t really have any. There are trade-offs at every turn. Free booze might not make up for legroom or IFE depending on the flights involved. And with airlines now offering wildly different in-flight experiences based on the aircraft in use it can be hard to nail things down to compare easily. It sucks.

Comments are closed.

BoardingArea