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.
15 comments on “Qatar Joins the Tangled Web of oneworld Partners”
I´ve been wondering about this a lot as well. Qatar seemed like the least likely of the three gulf carriers to join Oneworld. With this, SkyTeam is now clearly ranking third in Europe, and I am wondering if we will be seeing any significant moves by them in the near future.
Do you think this has any impact on the Indian carriers? Alliance-wise, they seem to become more and more obsolete as a lot of even the secondary cities can be reached from EU/US by the gulf carriers already.
PS: In the 7th paragraph, do you mean Doha instead of Abu Dhabi as the place through which IAG passengers can access Asian and African destinations?
AF/KL doesn’t care about AB but was forced to it because they want EY.
QR wanted Star but Star didn’t want QR. Oneworld has a big gap and QR will be able to grow without being hampered. The alliance ploy is simply to grab US and Euro FF members.
Eventually QF may stay in Oneworld despite the EK partnership. But AA-EY will be replaced by AA-QR, as evidenced by QR’s recent confirmation of ORD.
I hope all of this is communicated properly to the consumer, or FF’s are going to be confused.
Hermann – I think you’re right about Indian carriers in terms of global importance, but India is one of the largest countries in the world and it is only going to continue to grow. So there is still importance in getting Indian carriers in the alliances to tap into local traffic opportunities.
Easy Tiger!
Qatar is not about Australia (although it also serves the mining boom city of Perth) – as you know there are declining Europe-SW Pacific traffic flows anyway. And rumour has it, it was an alliance blessed by Qantas. BA serves Sydney already, and no “new airline” is allowed to serve Sydney from the get-go – they need to have served Melbourne for a period of time first – it was the same with Emirates
Qatar is also not just about Europe-Southern Asia. It’s also about the significant business travel flows between Asia and Africa, and basically anything in the Indian Sub-continent (where there are about 1.7bn people). For American, it’s an easy and sensible substitute for Etihad
Seems like a good catch to me? (and a lot more useful than Air Berlin, which doesn’t seem to fly anywhere useful, and can’t decide if it’s a low cost carrier)
Agree with you. But Akbar Al Baker is keen on expanding QR just as EK did. Sooner rather than later he will start other points in Australia and with London being a huge focus for them (their massive investment in a premium class lounge at T4 for example), they will look to tap Europe to ASEAN, Africa, South Asia.
*A has TK and MS for the middle east coverage. OW does not have much in this area. QR would have driven a hard bargain for its membership.
QR already has code share agreements with OW member elect MH. QR is the second largest foreign carrier to India with over 102 flights per week. EK still leads at over 189. The next closest competitor is LH will a little over 50. There is huge India / Pakistan / Bangladesh traffic to North America, Africa and now slowly Brazil.
What is not said in the article is the US connections, AA will offer QR to/from interior points. This is very important for QR to compete with the European carriers for the South Asia to US (BOM/DEL/KHI/DAC to EWR/JFK/YYZ/ORD/ATL/MCO/, BLR-SFO/LAX/DFW/IAH/ORD) and BKK/SIN to US East Coast etc.
AA can also look to leverage code shares with QR to cater to the Middle East, African, and South Asian markets.
kt74 – Qatar may become more useful in Australia but it will never become more useful than Emirates. There’s just no real benefit there. Good point about Asia – Africa. It should help there as well. In the end, I do think it’s a good catch (and yes, way better than Air Berlin). I just think it’s confusing for travelers.
So Now the question is does TAM cause LAN to jump ship and go to Star or does LAN cause TAM who only went into Star a little while ago to Jump ship and go to One World?
Jeremy – Well we know that LAN and TAM have to be in the same alliance, but I don’t see how it could be Star. Star now has AviancaTACA and COPA. Admittedly, they’re weaker in the southern half of the continent but they are trying to grow in Brazil. There’s no way those guys can all be in the same alliance.
Meanwhile, Delta is getting cozier and cozier with Gol and Aerolineas Argentinas is in SkyTeam, so that’s probably not going to work.
LAN, meanwhile, has a leading position in oneworld and with American, simply dominates Latin – US traffic. I can only assume that TAM will come over to oneworld unless there’s some decision to keep it independent for some reason.
LATAM can’t be in the same alliance as Avianca, that was a condition of the merger approval, so LATAM can’t be in *A.
However, LAN can stay in OW and TAM could (I stress COULD) go unaligned. I find it unlikely given now OW seems fine with partners have deep relationships with non-OW partners.
It is also a function of what the alliances demand of the members.
Remember when OW use to try and say that they had fewer higher quality and deeper relationships among members vs *A who had many members with different participation amongst the members. It seems like OW is just becoming like *A, but only smaller.
All good, except that Qatar are based on Doha, not Abu Dhabi. That’ll be Etihad.
While alliances were a new venture in the world of air travel, they may have now run their course and what you see happening now may be the new trend. Team up with certain carriers in areas of the world you want to tap into and forget about being a part of a whole alliance that you may not really gain anything out of.
Plus take American right now, are it’s woes hurting it’s alliance partners?
Fixed the Abu Dhabi problem. I just carried that over from my earlier mention of Etihad. Whoops.
As I understand it, oneworld has always been from the start a little more loose of an alliance than Star or Skyteam. Qantas is a great example – it has had long term partnerships with SAS and South African Airways on particular routes, while it finds itself often competing with other oneworld carriers like Cathay Pacific and now Malaysia Airlines. With Qatar joining the alliance, it will probably make it easier for them to codeshare on Qantas services to Asia or domestically to link up with the Melbourne-Doha and Perth-Doha services.
I was at the press conference launching Qatar’s Perth services and Akbar Al-Baker said there that they actually work with Emirates a fair bit in the Middle East, so seemingly to them they are an ally rather than a competitor. Could be interesting to see how that plays out with the QF-EK deal.
This reminds me of reading about possible NCAA conference realignments. And now my head hurts…
WallyWorld best beware the potential backlash from “U-Turn Al”…