This morning, Alaska is announcing that the MOU is signed, and it is now officially a member-elect in the oneworld alliance. This, of course, is no surprise. It said that it would join the alliance back in February when its deal with American came together. More recently, it said it was speeding up the entry timeline, so it would hopefully join by year-end. If that’s the case, why am I bothering to write about the official announcement of something we already knew? Well, I had a call with both Rob Gurney, oneworld CEO, and Nat Pieper, SVP Fleet, Finance & Alliances and Treasurer for Alaska, to learn more about the plan, and that gave me some great color to share.
From Nat’s perspective, this is a really important step for Alaska in that it brings the airline closer to “global relevance” and helps the airline reinvent its brand as a carrier than can get its loyalists all around the world.
But wait, can’t Alaska already do that? After all, it is already partnered with 6 oneworld airlines today — Qantas, JAL, Cathay Pacific, Finnair, British Airways, and of course, American… not to mention all the non-oneworld partners. So what’s the difference?
Nat offered much about what the alliance brings, and here they are in bullet form.
- Standardized reciprocal elite benefits
- Earning and burning miles with every oneworld partner
- Lounge access
- Priority check-in
- oneworld global support teams to help with connections/irregular operations
Wait, did I say upgrades? It’s true that oneworld today doesn’t have a cross-alliance upgrade program like Star does, but it has been reported by others that it’s coming. Rob confirmed that and told me that the expectation is the upgrade program should be functioning around the time Alaska comes online later this year. I tried to push for further details — like whether it would only be on stupidly-high fares like other programs — but he wouldn’t budge on that just yet.
The point is, Alaska travelers will be treated much better in this global group of airlines than they are today. In theory, these types of arrangements could be built bilaterally with each carrier outside the alliance, but Alaska is small on the global stage. Nat noted that oneworld carriers prioritize projects that impact other oneworld carriers first. So even if Alaska wanted to do these things, it could never get the tech resources from the other side to implement. But now, Alaska can plug its own infrastructure into the oneworld platform and be able to work with everyone much more easily.
Rob gave a tangible example of what that means, and it’s something I didn’t realize was happening between alliance carriers. When the switch flips, an Alaska loyalist who has the Alaska app on their phone will be able to check in for a oneworld partner flight on that app, get boarding passes, get gate information, and have flight disruption info pushed. This kind of integration would be impossible to get on a bilateral basis considering how long it has taken the alliances to even get to this point.
And when it comes to doing that work, Alaska is busy trying to get it all done in time for a “pretty aggressive” end of year join date. So far, Nat says the team is about 60 percent of the way “in terms of scoping all the things we need to do from a technology perspective, an airport training perspective, a passenger experience perspective, signage, all sorts of things.” The exact date has not been set, because it depends on the work all being completed.
When that day comes, what happens to Alaska’s existing non-oneworld partners? Nothing. Joining oneworld isn’t like joining Star Alliance. Oneworld allows airlines to continue to partner outside the alliance much more freely. That, however, doesn’t mean things won’t change with the portfolio.
One of the pre-requisites to joining the alliance is to have commercial agreements set up with each member airline. Alaska already has that with many of the members, but it has more work to do. And those discussions can lead to stronger partnerships that could replace others. As Nat explained it, “I think over time if a oneworld carrier were to enter into a nonstop direct market with some of our existing unaffliated partners in other alliances, we’re going to preference the oneworld partner.”
Can’t you just picture Qatar CEO Akbar Al Baker starting up a flight from Doha to Seattle and then smiling broadly when Alaska cancels its agreement with Emirates? I imagine those are the kind of things we’d likely see happen eventually, but Nat wouldn’t comment on my wild speculation. Go figure.
To be clear, while some partnerships could be at risk, it certainly won’t be required to walk away by the alliance. For example, there isn’t really anything that provides what an airline like Icelandair can offer, so that would seem to be safe from oneworld partners stepping in to offer better options.
At this point, Alaska is committed and the team is focused. But has Nat’s mind strayed toward joint ventures? Nope. As he knows well from his Delta days, “the best [joint ventures] work when all the partners are able to fly long-haul, and obviously that’s not in the cards for us any time soon.” So for now, oneworld is the big goal. And if all stays on track, it will be achieved by year-end.
Question… With this OW agreement, could we see something where QS adds service to SEA or far less likely PDX as we all know just how crowded LAX is? Or perhaps another international carrier such as JL.
SEAN – QS? Did you mean QF (Qantas)? For Qantas, LAX is a huge and important market, and that won’t change. But I was curious if we might see some of the SFO frequencies move up to SEA because of this. That would be an interesting opportunity.
Yeah, though SEA-SYD sure would be nice, it’s LAX and SFO that have the geographical advantage for North America to SYD connections in addition to being much larger local markets. There are only a very small handful of markets (mostly small cities in WA/OR/BC/AK, including my base of YLW) for which SYD-SEA-XXX is more efficient than SYD-LAX-XXX or SYD-SFO-XXX (or SYD-DFW-XXX or even SYD-HNL-XXX for Alaska). Quite different than Asia, where SEA has the geographical advantage and, although SEA-Asia is a big market in its own right, it’s a smaller market than SFO or LAX.
And I had the same thought about SEA-SYD when DL started their hub in SEA in combination with VA; they never made a noise about it. Of course, the right plane for that route would be a 787 (probably 787-8), not the 777s that DL and VA were limited to.
I know what you mean Alex Hill. And as for AS & B6 merging, give it time it will happen. When I first made such a prediction here some time ago, I saw it as a competitive move. Now with the reshaping of the airline industry thanks to Coronavirus, it may become a merger of both necessity as well as an opportunity against UA, DL, alittle with WN & certainly with AA.
Yes I did – my bad.
Seems like a no brainer to me. And when AS and B6 combined, AA won’t be able to complain!
As an Alaska frequent flyer, I love this move :) I absolutely cried when AA/AS had their “semi-divorce-split-time-out” a few years ago when MVPG/75K lost free bags, main cabin extra, boarding, and earn status miles on AA a few years ago. So I’m glad to see this come back!
This might be a dumb question, but is there such thing as anti-trust immunity for two US carriers? Could AA and AS have some sort of JV with ATI someday? Or is that only for US+Foreign carrier combos?
two US carriers operating in the domestic market cannot have ATI or JVs.
Yeah. I think two US carriers can both be part of a joint venture with foreign carriers; in fact, I’m pretty sure that UA and CO were both part of the joint venture with LH before their merger, just as DL and NW were joint venture partners with AF/KLM. But they still had to compete domestically. Not having long haul operations to contribute, AS can’t join any of AA’s joint ventures as far as I know.
I wonder if this will finally bring the end of the KE association with AS Mileage Plan? Most certainly if AA started SEA-ICH but it’s served by current partner and OW member JL. I also see HU being dropped by AS…a shame because those 50k o/w business class seats were a sweet ride to China!
Regarding the comment referring to Icelandic..it just ‘partnered’ with Baltic Air
Allowing for a ‘hop’ via Iceland, to the USA…