• Airline joint ventures and alliances becoming more commonplace

    Nick "Brainy Traveler"
    In the highly competitive airline industry, many airlines around the world have partnered via joint ventures (JVs) and alliances, for their mutual benefit and long-term viability. The alliance landscape that shapes the industry today is actually relatively young: the three major global alliances – Star Alliance, SkyTeam and Oneworld  – each were created within the past 15 years. While they haven’t been around that long, these three alliances account for more than 60 percent of total passenger traffic, which can offer both benefits and challenges to you as a traveler.

    Before I dive into these benefits and challenges, it’s important that you understand key differences between JVs and alliances. The focus for airlines in an alliance is to combine their respective footprint to create expanded global networks, to align schedules for maximum efficiency, to engage in some combined marketing efforts, and in some cases, to share revenue. Conversely, airlines participating in a JV are aligned quite closely as part of a narrower relationship that includes fewer total carriers.

    The alignment in scheduling and service levels between carriers participating in JVs or alliances provides some benefits for travelers. With complementary schedules, travelers often benefit from shorter overall travel times and better transfer options, while the alignment of frequent flier programs and other travel offers allow travelers to collect miles and other perks on each leg of their trip, regardless of specific carrier, as long as they are part of the JV or alliance.

    The biggest challenge with the growth of JVs and alliances is reduced competition, particularly in specific markets, where airlines that previously competed begin cooperating. This can result in higher pricing and/or reduced frequency of service in certain areas.

    The airline industry continues to evolve, and each change has potential to impact you as a traveler. Be sure to continue booking within your company’s travel policy and use approved booking channels to ensure you’re getting the best price and service available in your market. For more information about JVs and alliances, read the latest CWT ViewPoint.

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