An airline alliance is an aviation industry arrangement between two or more airlines agreeing to cooperate on a substantial level. Alliances may provide marketing branding to facilitate travelers making inter-airline codeshare connections within countries. This branding may involve unified aircraft liveries of member aircraft. In 2015, Star Alliance was the largest with 23% of total scheduled traffic in revenue passenger miles /revenue passenger kilometres, followed by SkyTeam with 20.4% and Oneworld with 17.8%, leaving % for others. In 2019, by number of passengers, Star Alliance was leading 762 million, followed by SkyTeam and Oneworld.
Rationale
Benefits can consist of an extended network, often realised through codeshare agreements. Many alliances started as only codeshare networks. Cost reductions come from the sharing of sales offices, maintenance facilities, operational facilities, operational staff, investments and purchases. Traveller benefits can include lower prices due to lowered operational costs for a given route, more departure times to choose from on a given route, more destinations within easy reach, shorter travel times as a result of optimised transfers, a wider range of airport lounges shared with alliance members, fast track access on all alliance members if having frequent flyer status, faster mileage rewards by earning miles for a single account on several different carriers, round-the-world tickets, enabling travellers to fly overthe world for a relatively low price. Airline alliances may also create disadvantages for the traveller, such as higher prices when competition is erased on a certain route or less frequent flights; for instance, if two airlines separately fly three and two times a day respectively on a shared route, their alliance might fly less than 5 times a day on the same route. This might be especially true between hub cities for each airline. e.g., flights between Detroit Metropolitan Wayne County Airport and Amsterdam Airport Schiphol.
Issues
The ability of an airline to join an alliance may be restricted by laws and regulations or subject to approval by authorities. Competition law issues must also be considered in some countries.
History
The first airline alliance was formed in the 1930s, when Panair do Brasil and its parent companyPan American World Airways agreed to exchange routes to Latin America. In 1990, the African Joint Air Services Accord between Tanzania, Uganda and Zambia led to the launch of Alliance Air in 1994, with South African Airways, Air Tanzania, Uganda Airlines and the governments of Uganda and Tanzania as shareholders. The first large alliance began in 1989, when Northwest Airlines and KLM agreed to large-scale codesharing. In 1992, the Netherlands signed the first open skies agreement with the United States, in spite of objections from the European Union, which gave both countries unrestricted landing rights on the other's soil. Normally landing rights are granted for a fixed number of flights per week to a fixed destination. Each adjustment requires negotiations, often between governments rather than between the companies involved. In return, the United States granted antitrust immunity to the alliance between Northwest Airlines and KLM. Other alliances would struggle for years to overcome the transnational barriers and lack of antitrust immunity, and still do so. Star Alliance was founded in 1997, which brought competing airlines to form Oneworld in 1999 and SkyTeam in 2000. In 2010 Richard Branson, chairman of the Virgin Group, announced his intention to form a fourth alliance among Virgin branded airlines. Then in September 2011, Branson said that Virgin Atlantic would join one of the existing alliances; this idea was repeated in October 2012. In December 2012, Delta Air Lines purchased Singapore Airlines' 49% stake in Virgin Atlantic for £224 million. Virgin America was absorbed into Alaska Airlines, which is not a member of any alliance, in April 2018. On February 14, 2013, it was announced that American Airlines and US Airways would merge, retaining the American Airlines name and would remain in the Oneworld alliance. US Airways' participation in Star Alliance lapsed. In 2012, in South America, LAN Airlines and TAM Airlines began their merger. In March 2014, with the merger complete, TAM left Star Alliance and became part of LAN in Oneworld. On September 21, 2015, the Vanilla Alliance was formed between several airlines based in the Indian Ocean region, in order to improve air connectivity within the region. The founding members are Air Austral, Air Mauritius, Air Madagascar, Air Seychelles, and Int'Air Îles. On January 18, 2016, the first alliance of low-cost carriers was formed, U-FLY Alliance. The founding members—HK Express, Lucky Air, Urumqi Air, and West Air—are all affiliated with HNA Group, although the alliance is also seeking airlines not within the group. On May 16, 2016, the world's largest alliance of low-cost carriers was formed, Value Alliance. The founding members were Cebu Pacific, Cebgo, Jeju Air, Nok Air, NokScoot, Scoot Airlines, Tigerair, Tigerair Australia, and Vanilla Air.
Current alliances
Star Alliance
, founded in 1997, currently has 26 members: Former members:
