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The Alliance is the "Airline"
We're all probably starting to notice - Jets painted as "SkyTeam" or "One World" popping up as management(s) again focus on "deal making" instead of their core operations.
This week Boyd picks up that topic in his weekly blog.
Quote:
Next: The Alliance As The Airline. But there is a new genre of air transportation in the works. It's called the Global Airline, a.k.a. Star, SkyTeam, and oneworld. As our 2008 Airline Trend Forecast indicated, the future is evolving not into individual international carriers, such as Air France, Continental, or Open Skies, but into global systems operating primarily under the brand of one of these three alliances.
The market power of these alliances will be breathtaking, and it will change the air transportation system and its core structure over the next ten years, if not sooner.
Just curious what everyone thinks of this concept from a labor standpoint.
Mike Boyd makes the point:
Quote:
And, by the way, where's all the new competition that US-EU Open Skies was supposed to gin up across the Atlantic, according to some of the media shamans? Recession or not, the silence is deafening.
As made clear by projections by Boyd Group International, US-EU Open Skies is based on the assumption that the EU is suddenly just one big happy unified family of countries that until now have been busy invading one another for the past 2,000 years.
As far as air travel's concerned, it's a pipe dream.
Quote:
Most importantly, it is fixin' to change the whole marketplace, especially for LCCs - and it's not going to be pleasant.
Boyd seems to think this will effect the Low Cost Carriers who at the present time do not have "alliances" to speak of. I don't know that I agree.
At the end of the day - I don't think all these "alliances" are all that revenue positive. What they do is allow airlines to rationalize their fleets like DAL and NWA did before the merger to feed A330's with Alaska's 737's and the like, allowing each to play to their strengths. As long as the LCC carriers continue to intensely focus on their core operations (which admittedly they do a pretty good job as evidenced by their continued survival and profitability) I don't see how grandma's yearly trek from New York to South Florida is going to be effected by alliances.
Last edited by Bucking Bar : 09-21-2009 at 09:00 AM.
Position: "...that's right, ma'am: not a 'pilot', just a 'co-pilot'..."
Posts: 348
In a way, Boyd answers your question as to whether the alliances are revenue postive: he says their market power will be "breathtaking".
As I indicated in another similar post on "our" Delta thread, these alliances are probably a better alternative to trying to "win" across the Atlantic or the Pacific. With the right agreements to share flying, they might be useful to labor, in the sense they provide revenue to fight over, and divide the market.
I know this is pathetic when compared to the dream of overpowering the competition going to and from their home country, but the problem with that dream is that it is of the wet variety. No country, no foreign airline, is ever going to allow us to simply poach their market, just as we cannot allow them to do to ours. Ergo, the question on alliances isn't "whether", but "how well designed". For example, would the law allow each group to honor cross-border strike?
BTW, this is a different concept from domestic scope, where we give our flying to another (presumably cheaper) provider, created for that purpose. Here, we're talking airlines that exist specifically for the purpose of doing our flying. As opposed to what Boyd is talking about, which are alliances of exisiting large, dominant flag carrieres that (naturally) want a piece of their own flying.
At the end of the day - I don't think all these "alliances" are all that revenue positive. What they do is allow airlines to rationalize their fleets like DAL and NWA did before the merger to feed A330's with Alaska's 737's and the like, allowing each to play to their strengths. As long as the LCC carriers continue to intensely focus on their core operations (which admittedly they do a pretty good job as evidenced by their continued survival and profitability) I don't see how grandma's yearly trek from New York to South Florida is going to be effected by alliances.
I think you argued against your point. What the alliances are allowing carriers to do is focus on their strengths and not worry about stretching themselves too thin trying to cover other areas they aren't as strong.
Alaska is a perfect example. They have a niche in the market operating in the pacific NW and Alaska areas. Nobody can operate in/out of this region as efficiently, safely, profitably as Alaska Airlines. If a pax needs to go from Fairbanks, AK to Syracuse, NY then Alaska needs help getting them there, so they codeshare with AA and the pax flies Alaska airlines from FAI-ANC-ORD then gets on American Eagle and flies ORD-SYR. Each carrier is playing to their strengths while gaining passengers they would otherwise not be able to help. Alaska can't operate profitably into SYR and American can't operate into FAI.
This same scenario is how the global alliances will be good for all carriers. Maybe DAL can't operate profitably into Marseille, France but their alliance partner Air France has the area dominated, and can most safely/efficiently/profitably get that pax to a point where DAL can take over and get the pax on the remainder of their journey to Augusta, GA.
In a way, you are correct that Grandma's trip from NY-FL won't be effected much because she flies on whatever LCC has the lowest price. In the grand scheme of things, that pax taking a leisure flight NY-FL isnt as desirable as the pax who needs to travel halfway around the world. The LCCs will eventually get in on the alliance thing IMHO (look at Jetblue and Lufthansa) which will really be the controversial step in the alliance discussion...
It will depend how they are structured, and where you are on the food chain. It should slow down the "I see a city or state or continent we haven't been to before, lets show the flag and put an aircraft there."
If I were a Major U.S carrier and I could sell seats on an "alliance" carriers airplanes and still use my name to sell the ticket, would I do it? If I could do that more often and turn more profit then owning wide-body aircraft and operating them myself, would I reduce my fleet and increase seat sales on my overseas buddie's a/c and possibly create more alliances with carriers that fly to and from the U.S?
If there was a "global airline", could it operate under under a 3rd world countrie's flag and be operated by a cheap crew and have my name as well as my buddie's name painted all over it? In the grand scheme of things, we just sell seats, just like we do with regional airlines. Is this a possibilty in our near future?
This is a conversation I had with an AA cpt a couple of months ago and I thought it might relate to this discussion. I'm not trying to go too off topic, but thought I would throw out some questions.
Position: "...that's right, ma'am: not a 'pilot', just a 'co-pilot'..."
Posts: 348
Quote:
Originally Posted by Bucking Bar
Just curious what everyone thinks of this concept from a labor standpoint.
I also forgot to add that, despite a pragmatic approach towards JV's and alliances, I also believe that, to the extent our approval is required, said approval must be expensive.
They need to be prgamatic too. If we can stop something, we need to be paid to allow it. Period.
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