The international aviation industry is arguably one of the most competitive and cut-throat businesses in the world today. Characterised by high revenue but notoriously thin profit margins, modern international airlines are constantly searching for methods to gain advantages over their competitors and attract new customers. One of these methods which has become popular since the late 1990s is that of the global airline alliance. Today there are three major alliances in operation, each containing different member airlines. These alliances offer airline customers various advantages over travel with a traditional carrier. Nevertheless, these advantages have been criticised by some as being anti-competitive, there are several examples of airlines that prefer to remain unaligned, and have become extremely successful. Who are these alliances, why are they so popular, and why are they so strongly criticised by some?
The Star Alliance was founded in May 1997 by five airlines from three different continents, and today is the largest and oldest of the three major alliances in operation today. It features the highest number of member airlines of any alliance, and also the greatest number of flights and destinations served (Star Alliance, 2011). It is also independently rated by Skytrax (2011) as the world’s best airline alliance, having additionally won the award every year it has been presented except for 2010, when the award went to Oneworld. Furthermore, the Star Alliance is probably the most useful for New Zealand based frequent fliers, as New Zealand’s principal airline, Air New Zealand is a member. Air New Zealand frequent fliers are able to take maximum advantage of co-ordinated scheduling, frequent flier points, and international lounge access on partner airlines such as Lufthansa, United Airlines, Singapore Airlines and Air China (Air New Zealand, 2011).
Another major airline alliance operating today is the Oneworld alliance. Founded on 1 February 1999 by giants such as British Airways, Cathay Pacific, and Qantas, it has expanded to include twelve member airlines, and has an additional twenty non-voting affiliate members, such as QantasLink, subsidiary of Qantas, and Dragonair, subsidiary of Cathay Pacific. Oneworld also won the Skytrax award for best airline alliance in 2010, and has won more international awards than the other two main alliances (Oneworld, 2011). However, some may argue that the quantity of awards received is irrelevant, and the awards by Skytrax are recognised by many as the leading airline awards. Oneworld is also a useful alliance for New Zealand based travellers, as Qantas’ membership allows frequent travellers access to the benefits of this alliance.
Skyteam was the last of the three major airline alliances to be founded, in June 2000. According to Rodrigue (2005), the Skyteam alliance holds 21 per cent of the market share, when measured by traffic, making it the second largest airline alliance operating today, after...