My time in Dublin wasn’t just spent drinking Guinness and learning about Travelport’s new merchandising platform. The main event was the Centre for Aviation’s (CAPA) Airlines in Transition conference. The gathering was an interesting one with the highlight being the dinner debate involving several airline CEOs.

Ultimately, there was a lot of industry dorkiness involved, but there was also a lot of good conversation on topics that would interest even the casual traveler. It’s always a party when IAG (parent of British Airways and Iberia) CEO Willie Walsh is around. He is never one to mince words. In particular, I thought there was a lot of good talk about the future of alliances, so I thought I’d share that here.

First off, Willie isn’t a fan of alliances at all. Wait. What? How could a founding member of an alliance not be a fan of them? It’s because he sees alliances as the best option available, even though they aren’t ideal.

The reason alliances exist is because we can’t consolidate and alliances are a poor substitute for proper consolidation.

Amen to that. Because of foreign ownership rules (no foreign entity can own more than a quarter of a US-based airline and rules are similarly restrictive in other countries), true global mergers can’t happen. And that’s a shame, because as Willie notes, mergers always trump alliances.

Alliances give you revenue synergies, but consolidation gives you cost and revenue synergies.

In general, nearly everyone at the event agreed that foreign ownership restrictions are stupid and should be abolished. But that’s not the case today, so we have to work with what we have. And that means alliances have an important place in this industry.

But what’s really interesting is seeing how different alliance members approach the idea of an alliance. An alliance like Star Alliance is incredibly strong, but you see few partnerships outside the alliance itself. Outside of regional partnerships, for example, United has just Aer Lingus and Jet Airways as minor partners.

oneworld looks at things differently. The way Willie sees it, alliances are great, but they are not exclusive. Airlines will need to go outside alliances to fill gaps. That’s why Willie supports what you might not think he would. That Qantas and Emirates tie-up that left BA out in the cold? In his eyes, the move “was clearly right for Qantas and for Emirates.” He didn’t seem fazed.

There’s a lot more happening in the gulf with oneworld carriers that seems strange from an alliance perspective. American is aligned with both Abu Dhabi-based Etihad and Bahrain-based Gulf Air. As mentioned, Qantas, which was aligned with BA for Europe service, unwound much of that relationship and instead tied up with Emirates based in Dubai (a mere 70 miles north of Abu Dhabi). While all this was going on, Qatar Airways, just a couple hundred miles west of Abu Dhabi and Dubai, joined oneworld. What a tangled web. But if it works for each individual member, then it works for the alliance; at least it works for THIS alliance.

I think Willie put this best when he quoted someone he would only identify as a member of another alliance… “Just because I’m married doesn’t mean I can’t have a mistress.”

For an airline like American, that means a whole host of partners including Air Pacific, Air Tahiti Nui, Alaska, El Al, Etihad, Gulf Air, Jet Airways, jetBlue, and WestJet. Willie thinks “it might not be necessary for American to have as many partners as it has, but there’s no reason it can’t exist.” For its part, BA has only relationships with Aer Lingus and Alaska Airlines. But its parent is more focused on consolidation right now anyway.

IAG was formed when both BA and Iberia were merged under one roof. Now there is also Iberia Express, an airline that was solely formed to operate short haul flights from Madrid at a lower cost (40 percent lower non-fuel costs, actually). This was all about lowering labor costs, and Willie readily admitted that if he could have, he wouldn’t have bothered starting Iberia Express but he had no choice to get costs down.

Now IAG is expanding again as it closes in on acquiring the piece of low cost carrier Vueling that it doesn’t already own. I find myself wondering if IAG would have bothered buying Vueling if it didn’t already own a little less than half of it. But Willie is convinced this will work (of course) and intends to keep Vueling operating as a completely separate entity.

I believe it can be done. Can a profitable full service carrier run a profitable low cost carrier? What has been happening is that an unprofitable full service carrier takes over a profitable low cost carrier and then brings it down.

The jury is most certainly still out on that one (mostly since it has never successfully occurred). But when it comes to alliances, the results are clear. They provide real benefits that can’t be achieved elsewhere until cross-border merger restrictions are lifted. But there won’t be a single approach to alliances, and oneworld seems to be keen to keep a looser rein on things than others.

[Original cheating photo via Shutterstock]

I had the chance to catch up with Simon Talling-Smith, the Executive VP of the Americas for British Airways, on the day that BA announced its first A380 routes from London to LA followed by London to Hong Kong. We had a good discussion about that and more, including the American/US Airways merger. Here’s yet another Across the Aisle interview…

Cranky: Let’s start with the news of the day. I just saw that on October 15, the A380 starts, right? I’m really curious about this one. There aren’t a lot of airlines that have a use for the A380 but with Heathrow being as constrained as it is, and with the chance of the UK government doing anything about it pretty slim, you do have a good use for it. I’m curious how you decided to start with Los Angeles?

Simon Talling-Smith: I think the 380 is really well-suited for long, high-volume routes where you’ve got a lot of traffic, where you’ve already got large aircraft flying on that route, like the 747s, and you’ve got big premium demand. A big part of British Airways is about the many, many customers who travel with us in First and Business. If you think about this airplane, it’s got 110 or so seats in First and Business. That’s a lot of premium lift, so a route like LA is perfect. It has very strong demand in the obvious areas, like entertainment, etc.

Cranky: What’s the breakdown? How many seats are in First and Business?
Simon: We’ve got 14 in First and 97 in Business
Cranky: And then I assume a decently-sized World Traveller Plus [premium economy] cabin?
Simon: Yep, 55 in World Traveller Plus and then 303 in World Traveler [coach]

Cranky: So if you’re going to be flying on the A380, are you going to notice a difference vs, say, the 777-300?

Simon: We’ve only just relaunched a lot of our seat designs for the -300, so you’ll notice a lot of similarities. But the 380 itself is a pretty amazing plane. I think when you fly on those planes you feel that extra space, and you feel how quiet they are. It makes a big difference when you’re in the air.

Cranky: I guess if you’re in Club [Business Class], you have this new kind of 3 seat section in the center?

Simon: Yeah, exactly. And that’s going to be a very private space. You find people go into Business have different tendencies whether they want more open seats or more private seats. If you want more privacy, that middle seat will be great.

Cranky: It’s on the upper deck right? Is that the entire upper deck?

Simon: No, we actually are a bit different. We are continuing to have the premium cabins in the front of the aircraft on both decks. One of the reasons is that it means everyone in a premium seat is close to the door getting on and off. I’ve seen people on some of our competitors at the back of the upper deck; it takes them a long time to get off. So we have First Class at the front of the main deck and then Business behind. Then on the upper deck, the first half is Business as well.

Cranky: So when that comes to LA, are you going to continue to have the same number of frequencies? If so, are the other 2 going to continue to be 747s?

Simon: We haven’t announced what we’re going to do in future seasons. I can imagine over time it will evolve, but to begin with, it will just replace one of our existing 747s.

Cranky: We now know the A380 is a fairly similar experience to the 777-300. Do you know when the 787 comes if that will have a similar onboard experience?

Simon: Again we’re not at this point making any announcements so we have to remember that those two aircraft are very different in size and shape and so your ability to use that space is obviously quite different. They’ll be serving different kinds of routes as well. My guess is it will be based on our 777-300 suite of products but you can expect some tweaks to make it appropriate for that size aircraft.

Cranky: The other big news is the American/US Airways merger. I know publicly BA has been supportive; how are you viewing this as an airline?

Simon: We think it’s good news. American are a key partner in oneworld and in particular with our joint business, we’re very close to them now. We’ve been in joint business for over 2 years, and anything that makes one of our partners stronger is a good thing, so we’re very supportive of that.

Cranky: I assume you’ve been actively engaging. I realize the merger isn’t done so there’s nothing to do, but you have to at least be running scenarios about route shifts and where you might expand?

Simon: Yeah, I think really so far this has been largely a conversation that American has been having with US Airways. They’ve been extremely good at keeping us up to date. Obviously there are competitive restrictions around what kind of discussions we could have about what it would look like in the future, but for now US Airways is still a competitor.

Cranky: But you can talk to American about it.
Simon: Yeah, we can do, but it’s not a big activity at the moment.

Cranky: It should give you some more opportunity, more feed in the US.
Simon: Yeah, exactly. US Airways brings a great network addition to American. It brings more transatlantic routes.

Cranky: Over in Europe, Virgin Atlantic just brought out Little Red flying domestic routes. I know this is Europe and not North America, but is there any sort of response to that?

Simon: Well we’re used to competing vigorously on those UK domestic routes. We’ve got a number of different airlines that fly around the UK and the addition of a new competitor is never a bad thing. We have a lot of experience and we’ve got a great product, we’ve got very good schedules, and we know what those customers want so we’re confident about competing with a new entrant.

Cranky: How has the European business been doing in general? There’s been a lot of struggle, not specifically with BA, but a lot of airlines “transforming” and “restructuring” and coming up with all sorts of silly names to try to fix things. So how are you doing?

Simon: I think it’s a great example of a very competitive business that’s always driving us to create new products, try new pricing structures. So for example we just introduced a hand baggage-only price on European routes out of Gatwick. It’s an example of how products and services are evolving in Europe.

Cranky: Is there a reason it’s just Gatwick? I know Gatwick is more leisure but there are some cities you serve from both airports. Was this just an easy way to test it? Or is it just that people view Gatwick as a low fare airport?

Simon: I think Gatwick is a great opportunity to try new products for customers and see how they like them, see how easy it is to make them work. It’s the right size to do that and it’s by no means impossible that products get repeated elsewhere in our network.

Cranky: Now, how about with Iberia? They’ve certainly been going through quite a bit of turmoil. It’s a tough transition getting it to a point where it’s going to be a good and profitable member of the group, but are you seeing good traffic flows? Is there still tremendous value on the BA side?

Simon: Yeah, I don’t want to go too much into traffic but what I see in the US is that our customers here like the fact that we give them better choices on routes into Europe, not just Spain and the UK. Now the combination of flying we have to a city like Paris makes the number of choices significantly greater. So for customers traveling across the Atlantic, adding Iberia is a great thing for us.

Cranky: Do you get any pushback from your customers about this? Because for the most part, you have a vastly superior product in comparable cabins. American is now taking 777-300s for a more competitive product and Iberia has plans as well, but do you find people saying, “hey I’m used to flat beds in Business or audio/video on demand and i’m not getting that”?

Simon: I think what you find is that customers are pretty savvy at choosing the way they want to get to the place they want to get to. They understand different times, frequencies, different products, and quite often those have different prices. So people choose what’s right for them. Sometimes that means flat bed products and sometimes it doesn’t, though if you look at Iberia they’re just upgrading their Airbus fleet. Same at American – the world is moving in the direction of proper flat beds.

Cranky: It’s more of a temporary issue I suppose, but I was wondering if you got pushback.

Simon: We haven’t had any pushback and what we do see is that more customers within our frequent flier programs are trying out American and Iberia and vice versa.

2022: Cheap flights, more rail and hands-free cars – CNN.com
This look into the future from CNN included a few quotes from me about the rise of ultra low cost carriers.

British Airways’ In-Flight Movie Rules Finally Join the 21st Century – Conde Nast Daily Traveler
British Airways has prodded the government to finally allow passengers to watch movies on built-in systems from the time they get onboard until the time they leave. No longer do you have to wait to be airborne.

In the Trenches: Choosing Company Holidays – Intuit Small Business Blog
One of the less thought-about tasks in building a small business is figuring out which days are considered holidays.

Almost a decade ago, I had the pleasure of being able to fly on one of the most incredible aircraft to have flown passengers around the world… Concorde. After the flight, I wrote the trip up for an aviation discussion group in which I’m still a member, and I stumbled across that trip report in my files yesterday. It didn’t take me long to dig up a few of the old photos from that trip, so I scanned them in (these were old school prints from a negative) and thought I’d share with you all today.

This trip was on the legendary flight BA001 from London/Heathrow to New York/JFK in December 2002, less than a year before the end of Concorde’s life as a passenger carrier. At that time, British Airways had started to get more liberal about letting employees and their friends fly on the aircraft at a heavy discount. Since I had a friend who worked at BA, I was able to take advantage of the opportunity. I don’t remember the exact amount, but I was able to fly in Club World (business class) from LA to London with a return on Concorde for under $2,000. It was worth every penny and more to get such an incredibly unique experience.

Here is the trip report I put together back in 2002 with only minor edits for clarity.
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Unfortunately, December 26 is Boxing Day in England. I don’t know what this holiday is, and to be honest, nobody else does either. I must have asked a half dozen different Brits and nobody could explain it to me. I’m pretty sure Harrod’s invented it as a national shopping day, but I could be wrong. All I know is that this meant the tube opened later than normal and the Heathrow Express train service was downgraded to a slower coach service. So though I wanted to get to Heathrow very early to enjoy the lounge experience, it was not to be.

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December 26, 2002
British Airways 001 Lv London/Heathrow 1030a Arr New York/JFK 925a
London/Heathrow (LHR): Gate in Lounge, Runway 27R, Depart 2m Early
New York/JFK (JFK): Gate 1 (?), Runway 31R, Arrive 7m Early
G-BOAF, Aérospatiale-BAC Concorde, Union Jack Tail, ~60% Full
Seat 2A
Flight Time 3h30m

I arrived about an hour and a quarter early and went straight to the Concorde check-in desk. They checked me in quickly and asked if I was okay with sitting in seat 14D (the seat I had pre-reserved). I said I would prefer a seat further forward in the window if they had it. The agent told me they didn’t, but he would put my request in the computer in case something opened up. After stealing an extra Concorde bag tag, I headed to security. BA First Class, Business, and Concorde passengers can go through the “Fast Track” line which had no waiting. This was helpful, because the regular security area had very long lines. Once I made it through security I headed to the lounge.

Upon arrival at the lounge, the agent at the front checked my boarding pass and told me that if I went to the gate (which is in the lounge), they would be happy to take my coat for me, so I did just that. After, I put my bag down and got a small sandwich from the restaurant area, which had the sound of birds in the morning being piped in through the speakers.

They had a full menu of breakfast foods, hot and cold, and of course a full bar. The lounge had big panoramic windows which looked out on two Concordes parked side by side. I don’t know where the other one was going, but it was at the adjacent gate to ours. I checked my email in their business center which also had fax machines, printers, and anything else you could possibly need. The bathrooms were also very nice… they had only one faucet for both hot and cold water. This is apparently something the rest of the UK has yet to figure out. There is also a spa for Concorde passenger use, but I did not have time for that.

An agent announced boarding at about 10a, and everyone slowly wandered over toward the gate. I didn’t see anyone famous, though there was a family that had the same odd inbred look that many of the royals have. I walked up to the podium and they took my boarding pass and informed me my seat had been changed to 2A since those people had not shown for the flight. I was surprised that a request in the computer actually turned into results, because that always seems to be a black hole. I walked through the jetway with several people wishing me a pleasant trip along the way down. I don’t know if that was their only job, but if so, then they were very good at it. I turned the corner and there she was… Concorde.

First thought? Damn that door is small. You really have to crouch down to get inside. If you turn to the left, the cockpit is there, but there is a huge galley area along both sides before you reach the first passenger seats. There is not much headroom in there, and anyone taller than me would likely have to duck. The new interiors are very attractive.

I grabbed a couple of things out of my bag and then squeezed my carryon into the small overhead bin. I sat down in the small yet somewhat comfortable blue leather seat which had cradle seat tendencies and looked out the extremely tiny windows, noticing how high we were off the ground.

There were no pre-departure drinks offered onboard, probably since we had just come out of the lounge, but they did take our drink orders for once we were airborne, and they did give us hot towels on the ground. As everyone settled in, the captain came on and welcomed us on board and told us about the weather in London (showers, of course) and New York (friggin’ cold and windy). Then, with his most perfect British accent, he said “the weather enroute doesn’t concern us. We’ll be well above it.” So cool.

[Editors Note: I later found out from a pilot friend who flew the Atlantic that day that it was a rough one with the seatbelt sign on much of the crossing. We, however, felt nothing at our lofty altitude.]

We pushed back a bit early and on our taxi out, the menu for the inflight breakfast was handed out to each person. Then the captain came on again and explained to us that he uses the “reheats” on takeoff, but soon after, he cuts them off to reduce noise, so we should not be alarmed when we hear the engine noise decrease dramatically.

The takeoff roll on this bird is phenomenal. I felt and heard the power right away, but it doesn’t seem to get going very quickly. It’s a long roll, and when we finally were airborne, we seemed to hover above the runway only climbing slightly for the first minute or so. Then, it was like Top Gun. Nose up, steep climb into the clouds, and then finally he cut the reheats off and we settled back down to a shallower climb.

At about 10,000 ft, he turned on the Mach meter in the cabin. This had Mach speed, MPH, outside temp, distance to JFK, and altitude. At that time, we were going Mach .93. We stayed between .93 and .96 until we reached about 26,000 ft. At that point, we cleared the coastline, and it was show time. The reheats came on and it was an odd feeling. It’s like little boosts of power, so you feel a surge forward and then it comes back a little.

Only a few seconds later, we broke the sound barrier.

It was a rapid climb to about 35,000 feet and then a slow creeping climb beyond that. We hit Mach 1.5 at 40,000 ft and then Mach 1.8 at 45,000 ft. We finally hit our cruise speed of Mach 2 as we passed through 48,500 ft. Of course, until this point, I had been staring alternately out the window and at the Mach meter with a drink in my hand. Once we hit cruise, it was time for the meal, so I switched my focus.

The meal service was phenomenal, even if I had no idea what the things on the menu actually meant. Here is my best translation of what they served me. (Yes, I’m frighteningly unsophisticated.) Surprisingly, all utensils were plastic, not just the knives:

• “Canapes” – little round things with lox and other stuff on them
• Appetizer “Carpaccio of pineapple with greek yoghurt, fresh berries and honeycomb” – fruit with cream, also served with caviar and toast and fresh bread
• Main Course “New season lamb with a thyme and herb pancake wrapped in brioche served with ginger and redcurrant compote” – great meat in the form of a hot pocket – there were 3 other choices, but this looked best
• Dessert “Chocolate and caramel tart with Earl Grey tea creme anglaise” – awesome chocolate death

Finally, I finished with some tea and I was a happy man. Just staring out the window of this plane is awe-inspiring. You can see the deep, dark blue thin atmosphere overhead and the curvature is noticeable. Unreal. Of course, the ride is completely smooth up there and while it’s loud, you don’t feel the speed in any way.

While I don’t usually mention the lavs onboard, I think this time it’s worth a mention. The lavs on Concorde are very nice. Of course, they’re small, so a mile high club encounter would have been very impressive. There was a red rose and bouquet of some other flowers near the sink. In addition, there were cloth towels to wash your hands.

I started talking to one of the flight attendants. Everyone on that plane loves what they do. I noticed that they did not sit down the entire flight to take a break. It must be a tough 3 1/2 hours, but then again, it’s only 3 1/2 hours. The flight attendant brought me a couple of certificates that the Captain would sign for me upon landing saying that I flew Concorde. Nice touch, especially for an airline dork.

A couple of hot towels later, it was sadly time to descend. The inital descent was rapid as we dropped speed and altitude very quickly. At about 32,000 ft, we came back down through Mach 1 and we leveled out. At 14,000 ft, we were down to Mach .72 and we were getting ready for landing. The coat that I had dropped off at the gate now appeared at my seat as we passed through 10,000 ft and 420 mph. At 5,000 ft, they turned off the Mach meter and we bounced our way down through the howling winds.

Though I’ve heard that Concorde is not very stable on approach, I didn’t find it to be uncomfortable at all, even with the strong winds. We touched down at about 225 mph (according to the flight attendants), and that was a odd sensation to be going so fast. That ended quickly when our friendly captain slammed on the brakes apparently trying to set the world record in the “Unbelted Passenger Toss” event. Fortunately, there were no contestants on our flight.

It was a slow taxi with all the snow and ice on the ground from the previous day’s storm, but we pulled into the gate, and I stayed back until everyone deplaned. I walked around a little, talking to the flight attendants, and then I went up to the cockpit and had a look around at the vintage dials and gauges.

I was very sad to step off the plane into the bitter cold NYC air, but it was a phenomenal trip. We hit a max altitude of 55,000, a max speed of 1280 mph, and it took 3:30 flying time. I will never forget this experience.

The worst kept secret in the airline industry was officially announced yesterday when Qatar Airways said it would join the oneworld alliance. This may not be a surprise, but it is going to create some confusion in the Middle East. There are a lot of seemingly conflicting relationships with airlines in this alliance that might make it difficult for travelers to understand exactly who is a partner and how. I wonder if this is a trend that’s going to continue.

Up until now, none of the big three in the Middle East (Emirates, Etihad, and Qatar) had opted to join an alliance. Turkish was probably the closest fast-growing airline in that general region to join an alliance when it picked Star, but the Middle East was still overall an unaligned region with tremendous traffic and growth potential.

Emirates has long been the shining star of the region and it has wanted to remain independent of a global alliance so it could work with any strategic partner it felt would be beneficial. It makes sense for the airline since it had a ton of traffic and many different airlines wanting to tap into that base. That’s why you’ll find Emirates partnering either via frequent flier program or codeshare with South African and Thai in Star Alliance, JAL in oneworld, Korean in SkyTeam, and a bunch of unaligned airlines including JetBlue and Alaska here in the US.

Emirates took its biggest step forward recently, however, when it created a deep partnership with oneworld’s Qantas to connect Australia with Europe better. So Emirates wants strong partnerships but it doesn’t want the cost and handcuffs that come with global alliances. It will just pick and choose.

Europe Benefits
When the Qantas deal was announced, people worried that British Airways would lose its feed into Australia with Qantas and that the alliance was fracturing, but within minutes the rumors of Qatar joining oneworld came to light. That rumor picked up steam despite pointed, bizarre denials from the airline’s chief. Now we don’t have to speculate anymore.

What does Qatar bring to oneworld? Well, it depends on where you live. Qatar’s meager Australia service (just Melbourne) won’t bring anything to Qantas loyalists since they already have an Emirates partnership that will blow it away. And for Americans, there isn’t a ton to be gained either since American already partners with Etihad (for now) to fly beyond Abu Dhabi to that part of the world.

The greatest benefit is for Europeans, and that is why I’m sure IAG (parent of British Airways and Iberia) CEO Willie Walsh was there for the announcement yesterday. This gives British Airways passengers the ability to fly into Abu Dhabi Doha and connect all over Asia and Africa as part of the alliance. I’m curious to hear what longtime oneworld member Royal Jordanian thinks about all this. It may actually strengthen RJ’s position.

The Tangled Web
What is really confusing here is all the overlapping partnerships. We know that the partnership between Emirates and Qantas is strong and not going away, but what about Etihad? This one is very confusing.

As mentioned, American has a partnership with Etihad today. (Etihad also works with a bunch of other airlines around the globe, many in Star.) Etihad now owns nearly 30 percent of Air Berlin, a recent addition to the oneworld alliance. So you would have thought that Etihad might be the one on the fast track to join oneworld. Clearly not. And in what was quite obviously a well-timed release, Etihad announced just a few hours before the Qatar press conference that it had aligned itself with Air France/KLM in a small codeshare deal. That deal also includes Air Berlin. I imagine we’re going to see this grow further and maybe end up including Virgin Australia some day. After all, Etihad owns 10 percent of Virgin Australia.

But is this the end of Air Berlin in oneworld? That is where I’m having trouble seeing the future. The question now is whether we see airlines truly aligning themselves with one alliance or if we see this type of straddling move where airlines can operate outside the lines. After all, Etihad’s boss said that oneworld was “secondary” in the scheme of things for Air Berlin. Could it possibly try to keep that membership while strengthening ties with Air France/KLM and still maintaining partnerships with some Star Alliance airlines?

In that same vein, can Qatar join oneworld and keep its partnerships with Star Alliance members ANA, Asiana, Lufthansa, and US Airways? There has never been a requirement to only partner with airlines in your own alliance, but it seems like it’s been a growing trend to spread your wings beyond alliance boundaries even if alliance partners serve the same purpose. And the alliances want Middle Eastern carriers so badly that they probably wouldn’t be able to make demands to stop this type of partnering anyway.

It seems to me that the only thing that would really stop this type of growth is government concern about antitrust issues. We saw that in Latin America where authorities prohibited newly-combined LAN and TAM from being in separate alliances. I think we should be prepared for this blurring of alliance lines going forward. It’s going to get confusing.