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.
