Quest Means Business   « Back to Blog Main
May 20, 2009
Posted: 1942 GMT

Today Delta airlines along with Air France/KLM announced their global joint venture. Sharing revenues and costs – effectively making it one airline in much of the world.

The press release trumpted the benefits to consumers – I am not sure I immediately agree.

The airlines are already members of SKyteam which boasts seamless travel. So why do they need to get into bed together and operate as one airline ?

We know this is really all about maximizing revenue and minimizing costs. On some key routes from the US to Amsterdam and Paris there will be just about zero network wide competition. Can this really be good for consumers ?

I am realist and know that from the airlines point of view this makes perfect sense

We are rapidly moving to the era where individual airlines won’t matter – in future we will fly Star, Oneworld or SKyteam. This is what this deal is really all about. The sooner regulators and airlines get honest about this and level the playing field the better for all- then true competition can begin.

Here are some of your views


darrenmak@richardquest Star Alliance has the most airlines, most destinations, and good First Class Award Availability. Flying them thru LHR 2day!

Lauratheexpat@richardquest I've given up on the whole thing – I never can seem to use my frequent flyer miles for anything other than duty-free!

kzamri@richardquest what's important to the airlines is the bottomline. In terms of fares I don't think there will be drastic changes

FabreuJ@richardquest Specific anti-trust laws should be enacted and enforced to ensure fair competition between airlines.

 hgmartinezrichardquest Alliances can work well for the fflyer, for me I fly American(1wrld) for business and redeem on Cathay or Qantas for leisure.@

 LauraMac09richardquest Now, the consumer is the company's competitor!@

 Mighty_Mole@richardquest You assume competition is fixed. There will always be new competition. Look at JetBLue and Virgin for your fresh faces.

 RigilKentaurusrichardquest the old European carriers are terrible: KLM/Air France/ Lufthansa@

 QueenLunte23@richardquest like those hudled together antarctict penguins they are trying to survive 2getha...

 JoburgViennarichardquest And isn't the concentration of capital what Marx predicted in the late 19th century. 🙂@

 hgmartinezrichardquest Service Carrier Australasia area. Star=Mass market due to having so many members. Skyteam= Somewhere between!@

 jamesfarrarRT @richardquest: NO. Alliances happen because M&A cannot. mrkt consolidation. Consumers are placated with a uniform mileage programme

 01theone@richardquest Good question -I think it will lead to a 2 class supply of services -very cheap e.g. JetBlue VS. high class like Etihad, etc.

WoodsonHawk @richardquest How can you beat a monopoly? We passengers will not win.

Malamoucha@richardquest it's a no win situation. they have to bed each other to survive. and we as the passenger pay in the end

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Filed under: Business •Quest Means Business

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Luis Martin-Cardozo   May 20th, 2009 8:07 pm ET

As a Crew Member for one of these alliances, it is hard to determine which alliance and/or airline is the best. All I know (as well as my fellow co-workers) is that we want to provide the best service inflight and the best connection from point A to point B or C, however, the competition among these alliances is so fierce, that makes the consumer like you and the rest of these bloggers on this topic to have the pressure to chose for one of us, so my advice to everyone is to go for the airline and the alliance that have everything you need and want in a way that is seamless to you, your family and your business. Unfortunately we have too many airlines to choose from, so I don't think it could be a win-win situation. Just keep in mind that no matter what airline and/or alliance you choose, inside the plane you have human beings (like myself and my colleagues) trying to do our best to provide you with whatever we have available. Happy Flying!

jmiller   May 20th, 2009 8:16 pm ET

I agree with the post that Star Alliance is probably the best as they have good 1st class availability. Their airlines are not the strongest or most up-to-date! Availability of seats is the key driver though. Also have One World with BA and saw on my statement that my points had expired and thus disappeared! What's the point of collecting them if you just lose them – felt like a scam. How does it serve BA's interests to delete my points? Simple answer really, but unfair.

icn2   May 20th, 2009 11:33 pm ET

One World and Star were close to neck and neck for US travelers. But that will change in October when Continental joins Star. Continental has a stranglehold on the South/Central Pacific with Continental Micronesia. No other airline fills that space as completely though some Asian airlines (JAL, Korean, Asiana, Cathay) try. Air New Zealand, ANA, Singapore, and Asiana fill in the gaps Continental Micronesia doesn't cover. One World has Quantas, Cathay Pacific, and JAL but they tend of focus on South East Asia and Oceania with a big hole in the Central Pacific (save JAL's flights to Guam)

Europe is a toss up between Star and One World. One World has a near monopoly on London with BA and American but the rest of Europe is far more evenly distributed between the two alliances.

Sky Team is weak. Sky Team is basically Air France/KLM and Delta (NWA). If it wasn't for those two there would be no Sky Team. Korean Air is the only other airline in the alliance worth a darn really.

Lisa   May 21st, 2009 3:26 am ET

STAR ALLIANCE. Our Aeroplan points have never expired. We are overseas teachers presently in Jordan and get tickets using our points for my Mum living in Vancouver to come see us for Xmas vacation. For reward tickets you've got to be organized and know dates 6-9 months in advance for peak travel times like Christmas to get tickets with fewest points. Sticking to one alliance has been easy for us and getting Mum to be with her granchildren almost priceless thanks to aeroplan. Those nasty taxes really add up. Air Canada seems to be picking up the level of their service now thankfully. A few years ago they had a bunch of very cranky flight attendents who really didn't act like they wanted to be in the skies. Guess the test will be this summer on our 6 AC flights.

Leonard Mulaudzi   May 21st, 2009 7:55 am ET

I think its a tight contest between oneWorld and Star Alliance but at the end I will give it to the Star Alliance its more bigger than the others.

Ken Lundberg   May 21st, 2009 3:46 pm ET

Star Alliance by number one...I have flown First class, Business, class, and yes even Economy. Always a enjoyable flight with friendly service.

Vincent   May 22nd, 2009 4:37 pm ET

Star Alliance all the Air Canada devotee who can't live without the service on Lufthansa, Thai and Singapore, not to mention ANA. Just wish United got into this century to make it perfect...

jaderdavila   May 25th, 2009 12:43 pm ET

flying people around is a damn dear business
i would not want to be ceo or have shares of those companies
in this field the chances for things going wrong is enormous
the costs are too high
the world needs only a handful of companies
the smaller will mingle

Adel   May 26th, 2009 6:44 pm ET

Well, JAL is by far gives you the feeling of the Japanese polite culture.
They treat you like you're alone on the airplane..

Thanks Quest! you're the Best! 🙂

J@n in Taiwan   May 28th, 2009 2:33 pm ET

Sharing airline revenues and their cost is much like a return to the cozy 'pool' arrangements of the '60's and '70's on routes. These were anti-competitive and thus illegal in the US from the start, and led to airline deregulation in the EU.
This alliance policy is a thinly disguised back door to a virtual merger. Such cartels can not pass unnoticed. Show me a monopoly that lowers fares for consumers – and just don't be fooled by your FF points which fill the empty seats for which we all pay.
Economies of scope (the number of destinations and services) in aviation have much more effect than those of scale. So, let the most efficient low complexity and full service airlines compete on their own under open skies. Bigger is certainly not always better or cheaper.

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