As the World Turns

As the  World Turns

alliance
noun
a union or association formed
for mutual benefit, esp. between countries or organizations.

In the frequent flyer world, there is a triad of global alliances: Star Alliance, oneworld and SkyTeam.

The first of the three came on the scene in 1997. The Star Alliance was formed when Air Canada, Lufthansa, SAS, Thai Airways and United Airlines joined together to not only codeshare, but to also link their frequent flyer programs in an international partnership. Today, Star Alliance carries on and is the largest alliance, approaching 30 members. And judging by a recent poll we conducted, the most popular global alliance by about 50 percent.

Although the Star Alliance is the first alliance still with us, the first alliance was formed in 1990 with Delta, Swissair and Singapore Airlines. Called the Atlantic Excellence alliance, each of these three airlines swapped shares to form the alliance but it started to fall apart in 1997 when Singapore opted out to join Lufthansa for a partnership that became part of the Star Alliance. The Atlantic Excellence alliance ended in 1999 when Delta started chats with Air France to eventually form SkyTeam.

For the interest of our readers, we will focus on how these alliances affect frequent flyer program members. However, the alliances were not formed solely with the frequent flyer programs in mind. They were formed mainly to increase the profitability of the member airlines and for cost reduction when sharing airport terminals, sales offices, maintenance facilities, catering, computer systems, operational staff and for savings when buying in bulk among several airlines instead of only one. The basic concept behind the alliances is that the airlines can get many of the benefits that they would gain from merging without having to face the hurdles of a merger such as strong government interference.

At oneworld’s 10th anniversary, the alliance said that the member airlines benefited by $5 billion from alliance fares and sales activities alone in its first decade. Around two-thirds, more than $3 billion, was regarded as “incremental” revenue. In other words, revenue that would not have been there if not for the oneworld alliance.

For the flyers, the coordinated schedules, shared airport facilities and synchronized booking make worldwide travel more convenient. They can expect more easy-to-book destinations, shorter travel times as a result of streamlined transfers, a wider range of airport lounges, a quicker route to frequent flyer program awards through earning miles into a single program from several airlines and convenient round-the-world tickets.

The Three

We’ll take a look at the three global airline alliances: how they differ, what they offer and how that might have an effect on your frequent flyer program experience. A chart is also included to quickly compare the alliances, which lists the partner airlines and more, such as how many destinations an alliance serves.

All three alliances offer members of the individual programs an extended worldwide award chart including much sought after round-the-world award tickets. In a recent poll, we asked travelers if they have ever taken a round-the-world flight. Almost 13 percent said that they have while around 17 percent said they have definite plans to take one. And nearly 45 percent said, when asked if they are planning to take one, “yes, in my dreams.” Of interest is that of those who said they have taken a round-the-world flight, almost 16 percent used the oneworld alliance while the larger alliance, Star Alliance, came in at just over 10 percent. We will not go into the specifics of the alliance award charts in this article–perhaps we’ll tackle that in another issue.

Recently, there has been a major shake up in these alliances when Continental Airlines abandoned SkyTeam to join Star Alliance. We’ll take a look at the ramifications of that change–the first time a major airline has moved from one global alliance to another.

For those of you not familiar with global alliances, here’s a very quick rundown from the frequent flyer program perspective: It’s best to pick one airline member of an alliance to collect your miles in. When you fly any member of the alliance, you should have those flight miles post to your chosen FFP. With global alliances, not only will you earn miles on all eligible flights on the various member airlines, but those miles will also count toward elite status. In theory, you could join a frequent flyer program as part of an alliance and earn elite status in that frequent flyer program without ever actually taking even one flight on that program’s airline. And as you move up in status in your chosen program, you will gain elite status in the global alliance opening up lounge access worldwide.

A note of caution, be sure to read the fine print of your chosen program. For example, US Airways Dividend Miles members do not earn miles when traveling on SAS on selected Swedish or Norwegian markets and members of Continental OnePass will not earn miles for Tango fare flights on Air Canada within Canada or between Canada and the U.S., while United Mileage Plus members can earn 50 to 100 percent of miles on similar routes within Canada and between Canada and the U.S. Look for these types of restrictions in every frequent flyer program and choose your FFP accordingly.

oneworld

The global alliance called oneworld was launched in February 1999 with American Airlines, British Airways, Canadian Airlines, Cathay Pacific Airways and Qantas Airways. The alliance is celebrating its 10th anniversary this year and now boasts 11 partner airlines. Oneworld also has affiliate airline partnerships including American Eagle, BA Citiflyer, Dragonair and several more–all airlines that provide regional service for the member airlines.

Mexicana is the latest airline to join oneworld as of last month and Russia’s S7 Airlines is expected to join in 2010.

The oneworld alliance boasts that it is the only alliance with an airline based in Australia (Qantas), South America (LAN) and Asia’s Middle East (Royal Jordanian) although it falls well below the Star Alliance in the number of member airlines while just having a couple more member airlines than SkyTeam. Although the alliance has Cathay Pacific, Dragonair and Japan Airlines, it does not have a Chinese domestic airline like the other two alliances.

Upper tier frequent flyers who fly with oneworld are generally very pleased with the airport lounges. And as frequent flyer Donald Kay of Australia put it, even though he feels that he could save money if he did not choose to only fly with oneworld carriers, “… there is some comfort in being top tier and being well looked after when things go pear shaped.” Members also report that they enjoy the lie-flat seats offered by airline members (British Airways Airlines and Cathay Pacific) and the one-way award capability (American Airlines and British Airways).

Oneworld does not offer an upgrade program that allows customers of one member’s program to upgrade on flights operated by another member, which is seen as a major drawback by many frequent flyers. But on the plus side, oneworld reports that they are aiming to be the first of the global alliances to enable FFP members to book all award flights online. “Most airlines now enable FFP members to book award flights on their own airline online, but if they want to book an award flight on an alliance partner, they have to apply via email or phone,” said Michael Blunt, VP Corporate Communications of oneworld. “We are working to move all that online.” He said that the capability is being rolled out across all the member airlines. British Airways was the first oneworld member airline to offer booking all oneworld partner award flights online and Qantas has begun the service for flights operated by American Airlines, British Airways, Finnair, Iberia, LAN and Malev Hungarian Airlines with Cathay Pacific, Japan Airlines and Royal Jordanian to be added soon. Iberia has also started the process. We expect this to be an ongoing and somewhat lengthy process for all airlines to offer this capability. As you will read later in this article, oneworld is not the only alliance putting a priority on online award booking.

There is a FlyerTalk.com thread titled, “Who will be the next oneworld member?” where you can keep up with the rumors of which airline will be the next oneworld member. Visit http://www.insideflyer.com/link/?1956 – Some of the airlines that frequent flyers would like to see join include JetStar, “I don’t understand why they aren’t already, being a QF [Qantas] subsidiary and all…” India’s Jet Airways and Canada’s Porter Airlines (which currently has no frequent flyer program partnerships).

SkyTeam

SkyTeam was launched in June 2000 with AeroMexico, Air France, Delta Air Lines and Korean Air. In September 2004, Continental Airlines along with KLM and Northwest Airlines joined the alliance. As of Oct. 24, 2009, Continental left the alliance to join the Star Alliance. Before Continental left SkyTeam the alliance served 905 destinations, it now serves 856–a difference of only 49 destinations. And the alliance continues to serve 169 countries as before. You might wonder how this can be possible with an airline the size of Continental leaving the alliance–it’s simple, Delta serves 90 percent of the markets that Continental serves. And there are those who look at the loss of Continental as a blessing–after all, there will be fewer flyers vying for award seats and upgrades.

Delta would like to point out to its members that although Continental has ended its partnershp with Delta and the SkyTeam, the world is still at their feet. A Delta representative reminds members that with Delta’s merger with Northwest, passengers can earn and redeem miles on an “expanded, global network that offers more flights to more destinations worldwide than any other airline.”

In addition, Delta’s recent partnership with Alaska Airlines allows SkyMiles members to access Alaska’s Board Rooms and provides elite reciprocity privileges for SkyMiles and Alaska Airlines Mileage Plan members. Benefits include priority boarding, check-in and seat assignments, and reciprocal upgrades for Platinum or Gold members in either airline’s frequent flyer program.

And, Delta’s joint venture with Air France has given SkyMiles members access to a strengthened international network, most recently focused on three regions: trans-Pacific, trans-Atlantic and Africa.

Although SkyTeam might be able to weather the loss of Continental, it still has a ways to go in a global alliance popularity contest. SkyTeam was singled out as the “weakest” alliance in our recent poll of travelers, getting over 50 percent of the vote for the weakest alliance.

Future members for the alliance include Malaysia Airlines, Garuda Indonesia and Romania’s TAROM (as an associate airline being sponsored by Air France) so it looks as though the alliance is working toward catching up with oneworld when it comes to member airlines.

One of the downfalls that we hear from travelers about the alliance is that there is no true five-star airline member–and one that you can aspire to for a trip of a lifetime flight experience. With the addition of Malaysia Airlines, which one could argue is a five-star airline, this “hole” might soon be filled.

Another complaint is that there is poor coverage by SkyTeam to the Southern Hemisphere, the Middle East and India. Although it must be pointed out that regarding the Middle East, only a couple of airlines from that part of the world are a part of any alliance (Royal Jordanian is in the oneworld alliance and Egyptair is in the Star Alliance). SkyTeam has said that they are focusing on enhancing their network in Southeast Asia, India and Brazil.

And in September of this year, SkyTeam had this to say in a SkyTeam NewsFlash: “Currently, SkyTeam is investigating partnerships with non-air travel providers to provide certain benefits exclusive to SkyTeam passengers.” This is an interesting development and one that we will watch closely.

Yet another pet peeve for those who fly with SkyTeam is regarding upgrades–you must buy your ticket at full-fare rate (Y class) in order to get the upgrade–no upgrades are available from discount, or even slightly less than full-fare coach fares. But at least upgrades are available. It was just about a year ago that the SkyTeam Mileage Upgrades program was introduced. At the time, a press release promised to “improve future phases of the offer, including expanded criteria for eligible flights, the inclusion of Associate-operated flights and the ability to make and confirm requests online.” We asked a contact at SkyTeam how these plans were coming along and she said, “SkyTeam continues to evaluate the first phase of the Mileage Upgrades program to improve future phases of the offer.” Which sounds to us like the process will take some time.

SkyTeam has also released statements that passengers can “expect bolstered service to certain regions, including Asia Pacific, with upcoming summer schedule announcements from SkyTeam member airlines.” And passengers should look for special promotions to come this summer when SkyTeam celebrates its 10th anniversary in June–along with news for the alliance’s future plans.

Star Alliance

As we mentioned earlier in this article, Star Alliance is the oldest and largest global airline alliance. As well, it is the only global alliance to have won a Freddie Award.

Because Star Alliance is the largest of the alliances, it stands to reason that when looking for your “best bet” airline that can provide you with a fast track to elite or to compare Star Alliance carrier elite benefits, you might need a little help. Luckily, there are FlyerTalk members willing to lend a hand. Check out the Star Alliance Gold Comparison chart put together by FlyerTalk’s BlondeBomber at www.insideflyer.com/link/?1950. The chart is a good tool for anyone who is wondering which airline in the Star Alliance they should aim for elite status in.

Air India, Brussels Airlines and TAM are set to join Star Alliance bringing the total member airlines to 25 (28 counting regional members). The path to membership by Air India has been a challenge and has been pushed back because of that airline’s merger with Indian Airlines and the challenges of integration. During the Continental Star Alliance induction ceremony, Air India’s representative said that the airline expects full membership to occur by the second half of next year. Along with Air India, there have been rumors that India’s Jet Airways might also join the alliance. Brussels Airlines should have an easier path to Star Alliance membership through Lufthansa while TAM will open up popular awards to Brazil and South America.

Aegean Airlines and Ethiopian Airlines have applied to the Star Alliance and there have been news reports that the alliance plans to bring in the three regional members as full members: Croatia Airlines, Adria Airways and Blue1.

The Star Alliance has size on its side when it comes to lounge access and member airlines offering thousands of flights. Customers can also use their miles for upgrade awards on Star Alliance flights. Currently, you can redeem miles for upgrades in the following Star Alliance airlines: ANA, Air China, Air New Zealand, Asiana, Austrian, Continental, LOT Polish Airlines, Lufthansa, SAS, Shanghai Airlines, SWISS, TAP Portugal, Thai and Turkish Airlines (notice that United is not on that list). Upgrades are available from Y and B fares. (Y is the usual unrestricted, full-fare coach while B has minimal restrictions, also full-fare, but not as much.)

But the biggest news of late for the Star Alliance is the new member, Continental Airlines, the world’s fifth largest airline serving 130 domestic and 132 international destinations throughout the Americas, Europe and Asia. Last year, when Continental and United came close to a merger but backed down, Continental received a call from United proposing to sponsor the airline into their alliance. On Oct. 27, 2009, Continental was officially welcomed into the Star Alliance. A press release read in part, “Since making the strategic decision 16 months ago to join Star Alliance, Continental has been intensely focused on making preparations for this change,” said Continental Chairman and CEO Larry Kellner. “For our customers, the change will be seamless and will deliver significantly improved travel opportunities.” Time will tell if the transition truly will be “seamless” but it’s obvious that the airline has made great strides to make the transition effortless for their frequent flyer program members.

From SkyTeam to Star Alliance

How does a major airline like Continental make the transition from one alliance to another? Careful planning, thoughtful implementation and no doubt, a few headaches. As the CO Insider (Scott O’Leary, Managing Director, Customer Experience) posting on FlyerTalk.com said, “Yes, there’s going to be some bumps as we complete our transition, and we appreciate your patience while we cement everything in place.” He continues to tell FlyerTalk members that Continental will use FlyerTalk as a feedback channel and will quickly work to clear up any problems.

We also see Continental as an impetus for change for the alliance. Star Alliance’s United Airlines has long been suspected of (and never has denied) filtering the awards available for their members on other Star Alliance carriers.

The Star Alliance appears ready to tackle this aspect of FFP membership head-on with recent comments citing an availability search tool to come in 2010 that shows award inventory on all Star Alliance airlines. FFP members will not be able to book when using the tool, but the tool will make it much easier for them to see the awards available across all Star Alliance partners.

Currently, for example, United Mileage Plus members look to the Web sites of Air Canada and ANA to search for award availability to spend their miles on partner airlines. We know, it seems strange to search for award availability for United miles on the ANA Web site to see where the free seats might be.

With Continental introducing the latest in technology advances on their Web site, it will be clear to many members that a partner award search will become much more transparent than it currently is.

Another positive change, perhaps not coming from the addition of Continental, is that next year all members of the Star Alliance will be required to offer frequent flyers the ability to book upgrades with their miles, a function that only some members currently allow. These types of changes may be at the risk of “new and improved” award charts but it is not yet clear that will be the case.

Global Alliances
Alliances Airline partners Destinations Countries served Airport lounges
oneworld – www.oneworld.com
American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malev, Mexicana, Qantas Airways, Royal Jordanian. Future member: S7 Airlines
11 750* 150* 550*
SkyTeam – www.skyteam.com
Aeroflot, AeroMexico, Air France, Alitalia, China Southern Airlines, Czech Airlines, Delta Air Lines, KLM, Korean Air. Associate partners: AirEuropa, Kenya Airways. Future members: Vietnam Airlines and TAROM as associate member.
9 856 169 415
Star Alliance – www.staralliance.com
Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian Airlines, bmi, Continental Airlines, Egyptair, LOT Polish Airlines, Lufthansa, SAS, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Thai Airways, Turkish Airlines, United Airlines, US Airways. Regional members: Adria Airlines, Blue1 and Croatia Airlines. Future members: Air India, Brussels Airlines and TAM.
25 1,071/td> 171 954
* Approximate numbers.

Here are just some of the changes that OnePass members will see:

Airport co-locations: By the end of this year, Continental will have physically moved airport operations at 11 airports around the world to be closer to other Star Alliance airlines. Continental has moved terminals at Frankfurt, Tokyo/Narita, Beijing, Chicago, Honolulu and Shanghai.

Booking class realignment: Continental has revised its booking class codes to be compatible with other Star Alliance airlines. The transition included a 72-hour process to revise the fare codes stored within over six million passenger reservation records that were active at the time the change was made.

Customer service policies: To make these policies more consistent throughout the alliance, Continental made some changes. For example, the complimentary baggage allowance for Continental’s Platinum and Gold Elite customers, as well as Star Alliance Gold customers from other member carriers, has increased to three bags weighing up to 70 pounds each, which is consistent with the established Star Alliance Gold benefit.

Employee training: Thousands of Continental employees have received training specifically on Star Alliance processes and services, including airport and inflight procedures, frequent flyer program reciprocity and orientation to Continental’s prospective alliance partners.

Frequent flyer program changes: OnePass has introduced a new award chart which more closely matches new alliance partner United Mileage Plus and means that for many awards, the cost in miles has increased. For example, OnePass members will now be asked to redeem 55,000 miles for a coach roundtrip SaverPass award between the U.S. and Europe, up from 50,000 miles, and 105,000 miles to fly in first class on the same route, up from 100,000 miles. For a PDF of the new award chart, visit http://www.insideflyer.com/link/?1964

When redeeming miles for awards, members no longer are bound by the Saturday night stay requirement for domestic SaverPass awards–this is good news for business travelers who use their miles for business meetings.

A new interactive online award chart has been introduced where OnePass members click on their origin and destination to get a rundown of the awards available between the two regions.

Of great interest to frequent flyers is the ability to book partner award flights online. As of day one with the new alliance, members can book award flights online on Copa Airlines (including Aero Republica), United Airlines, US Airways, Air Canada, SAS Scandinavian, TAP Portugal, LOT Polish Airlines, Air China, Blue1, plus inter-island add-ons operated by Hawaiian Airlines and Island Air. Award bookings for all other partners, as well as three-cabin first class awards still need to be booked over the phone but OnePass says that booking for these awards will be available in 2010. SWISS, Egyptair and Shanghai Airlines are taking a bit longer for members to be able to book awards on these airlines, via online or phone, but by the time this magazine is published SWISS and Egyptair awards should be available with Shanghai taking a bit longer.

The partnership with Qantas will officially end Dec. 17, 2009. From that date, OnePass members will have to mostly rely on Air New Zealand to get them down under. And one flyer commented about Air New Zealand as having “fewer flights in a year to all their destinations than most major airlines have between their top route pair in a week.”

Other developments include that first, BusinessFirst and international business class SaverPass availability for Platinum members has been expanded on Continental flights. Previously, this benefit only included BusinessFirst itineraries. Also, Star Alliance upgrade awards are now available. It’s a better value to use your miles for Continental upgrades, but members now have the option to redeem miles for upgrades on 16 Star Alliance partners. The awards are per segment, not per one-way flight and in most cases, upgrade awards are only valid in conjunction with Y and B class fares which are full-fare and “discount full-fare” respectively.

And based on numbers alone, elite-level OnePass members should be pleased with the new options for airport lounge access. Star Alliance Gold members (OnePass Platinum and Gold Elite members) now have access to most Star Alliance member lounges (over 800 lounges) when departing on a same-day international Star Alliance itinerary. And with the change from SkyTeam to Star Alliance, mid-tier OnePass Gold members now have lounge access.

Presidents Club members and up to two guests now have access to United Airlines Red Carpet Clubs and US Airways Clubs without a same-day ticket requirement. Presidents Club members will also have access to hundreds of lounges operated by Star Alliance members when departing on a Star Alliance flight.

The reaction from members, as always, is varied but most seem pleased and tested Continental’s Star Alliance award booking as soon as humanly possible–in the process finding all the “bugs” that needed to be addressed.

We recently polled frequent travelers asking, “Regarding Continental leaving SkyTeam and joining the Star Alliance, which of the following statements is most accurate?” And the answers, by percentage, follow: 46.0 percent said, “Continental OnePass members will be better off”; 35.3 percent said, “time will tell”; 13.4 percent said, “members will be worse off” and just 5.3 percent said, “members will be neither better nor worse off”.

Global Elite

One of the most important aspects of the global alliances for frequent flyers are the elite-level programs that each offers.

Oneworld has a three-tiered program: Ruby, Sapphire and Emerald. SkyTeam and the Star Alliance both have a two-tiered program; SkyTeam offers Elite and Elite Plus status while the Star Alliance offers Silver and Gold status.

Members gain status in these global alliances by becoming elite-level members in one of the member airline’s programs.

For example, when Continental was welcomed into the Star Alliance, the mid- (Gold Elite) and top-tier (Platinum Elite) OnePass members were welcomed into Star Alliance’s top-tier elite level, Gold, which offers among other benefits, worldwide airport lounge access for the Gold member and a friend when traveling on any Star Alliance member airline, regardless of your class of travel. Specifically, Continental, United and US Airways Star Alliance Gold Elite members may access any Presidents Club, Red Carpet Club and US Airways Club on the day of international travel. All other Star Alliance Gold Elite members may visit any designated Star Alliance Gold lounge before departing on a domestic or international Star Alliance member airline flight. Star Alliance Gold members are invited to bring one guest to any Star Alliance member club or lounge. Guests must enter with an eligible Star Alliance Gold customer and must depart on a Star Alliance airline, though not necessarily on the same flight.

To achieve Gold Elite in OnePass, a member must earn 50,000 elite qualification miles or 60 points (elite qualification miles are based on the number of paid flight miles traveled and the fare purchased. Elite qualification points are determined by the number of paid flown segments traveled and the fare class purchased). United Mileage Plus and US Airways second-tier members and above also get Star Alliance Gold and also gain that status at 50,000 elite qualifying miles or 60 segments.

It’s similar for oneworld member airlines. For example, American AAdvantage second-tier members who earn their status at 50,000 elite qualifying miles receive oneworld Sapphire status, which comes with business class lounge access when flying internationally. Lounge access is not available when travel is wholly within the U.S., Canada, Mexico (except Mexico City), Bermuda, The Bahamas, and the Caribbean.

In SkyTeam, Delta SkyMiles members in the second tier elite do not get the top tier elite in SkyTeam (Elite Plus) but receive the first tier (Elite) which does not offer lounge access. You must be a SkyMiles Platinum Medallion member (offered at 75,000 elite qualifying miles) before SkyTeam lounge access for international flights is granted.

It’s worth noting that U.S.-based programs do not offer lounge access to North American global alliance elite members when they are flying within the U.S.–members still need to procure a separate lounge membership for that. Programs within the U.S. have always been less liberal with lounge access.

Without going into too many details here, you can see that the benefits can be great (who doesn’t enjoy an airport lounge atmosphere compared to mucking it up with the crowds in the terminals, fighting for a place to sit?)–but the alliances do differ and it pays to do your homework when you’re selecting the best global alliance for you.

Along with lounge access, elite members can expect some of the usual benefits that come with elite including priority check-in, standby, waitlisting, and boarding and baggage handling; sometimes an extra baggage allowance (Star Alliance Gold) and such benefits as a confirmed full-fare economy seat at least 24-hours from departure on a long-haul international flight, even if the plane is sold out (SkyTeam Elite Plus).

Before we move away from looking at the elite programs of the alliances, just a note about the Star Alliance. Although the largest alliance, and generally considered the best, this alliance has earned the reputation of possibly being the most inconsistent between the member airlines when it comes to such things as priority boarding. Specifically, United Airlines Mileage Plus members have reported that the airline’s policy of pre-boarding for Star Alliance Gold members seems to conflict with the alliance’s policy even though the alliance policy would seem to apply for all member airlines. If you would like to delve further into this, you can read the FlyerTalk link at http://www.insideflyer.com/link/?2000

The Future of the Alliances

Because these alliances are much bigger than mere frequent flyer partnerships, the FFPs can be seen as passengers on the mammoth ships that ply international skies. The European Commission has been looking closely at airline co-operation on transatlantic routes; specifically, “existing and planned” cooperation between Star Alliance members Air Canada, Lufthansa and United Airlines, along with new Star Alliance member, Continental Airlines and oneworld members American Airlines, British Airways and Iberia. The Commission is looking into whether agreements between these airlines breach E.U. rules prohibiting restrictive business practices. While on the other side of the pond, the latest news from the U.S. is that American Airlines continues to seek antitrust immunity in its proposed alliance with British Airways, Iberia, Finnair and Royal Jordanian, which some economists say would increase American’s revenue by three to five percent.

As we go to press, there is much speculation that JAL may jump from oneworld to SkyTeam. Actually despite the fact that JAL is a oneworld member, they have long enjoyed a frequent flyer relationship to earn and redeem miles on Air France which is part of oneworld. And we believe that JAL would be a better fit for the SkyTeam alliance because currently Northwest (now Delta) uses Tokyo/Narita as their Asian hub and that means better and more direct links for passenger traffic.

Right now, SkyTeam (a la Delta) relies on Korean but Delta’s route system doesn’t connect to Korean as well as it does to JAL. And besides, Korean is less than half the size of JAL. Both Delta and American are pitching JAL now because of two reasons–JAL is in trouble financially and because there are government talks going on to provide greater “open skies” flight rights. American really can’t afford to be in on this but has no choice. Oneworld is the smallest of the global alliances and the loss of JAL would leave a huge hole in that alliance (even though they have Cathay and Qantas in that region). There is some speculation that Cathay may eventually leave oneworld anyway since Air China has been bidding up their ownership stake in Cathay–Air China is a Star Alliance member.

It is tricky because part of the Japanese government now supports the Delta bid while another part supports the American bid. And in both cases money talks since Delta has indicated that Air France will help with the financing. (Delta is better off financially than American to bid since they cleaned themselves up via bankruptcy but they are only just better–not great– when compared to American.) American has indicated that British Airways might participate to contribute some money but BA has recently cut a lot of staff so it is apparent that they don’t have that much money either. But broke or not, this is a golden opportunity to get a claim on an airline like JAL at such a discount rate–JAL is bleeding so much and needs to raise money or go out of business. It is not clear just how far the new Japanese government will go to keep the airline flying or force a sale.

When all the dust settles, we believe that, especially with the reality of a global economy, these alliances will endure. And just as with most alliances, the partners might change and an entire alliance might fall, but the idea will prevail.

Although frequent flyers have embraced these alliances, they also continue to expect more from them, “I find that no alliance delivers what is promised and cooperation is sporadic at best,” said one traveler. “Star probably does have its act together a bit better than the rest, but it’s not that great.”

We asked veteran frequent flyer, KiwiFlyer, of his impressions of the two alliances he knows best and you can read his thoughts on the Star Alliance vs. oneworld online only at InsideFlyer.com.

For frequent flyers, the questions will remain, “which alliance will offer me the fastest route to elite, which will offer me the flights and awards I want and which alliance offers the best airport lounges and first class experience?” among other, highly individualized questions and answers. With what you’ve read here, and with continued research and evaluation, you’ll be well on your way to making the most of your chosen airline alliances.

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