Globally Speaking

Globally Speaking

In 1997, Paul McCartney was knighted by the queen, the ashes of Gene Roddenbury, Star Trek creator, were launched into space, Tony Blair was elected to Prime Minister of the U.K., Harry Potter and the Philosopher’s Stone was published, the first episode of South Park was aired, President Clinton named his labrador retriever “Buddy” and the first of the three current global airline alliances was formed–Star Alliance.
The Star Alliance was formed when Air Canada, Lufthansa, SAS, Thai Airways and United Airlines joined together to not only codeshare, but to link their frequent flyer programs in an international partnership. Today, Star Alliance is the largest alliance with 27 member airlines. And judging by a recent poll we conducted, the most popular global alliance with over 60 percent of those responding saying Star Alliance is their preferred alliance.

The Star Alliance is the oldest global airline alliance but it was not the first. The first alliance was formed in the mid-90s between Austrian Airlines, Delta Air Lines, Sabena and Swissair. Called the Atlantic Excellence Alliance, the alliance promised “optimum convenience”, according to Delta’s executive vice president at the time. “The partners have synchronized flight schedules to offer seamless connections and each carrier facilitates reservation procedures. Passengers may call any of the four carriers to book transatlantic flights and connecting services, no matter which alliance airline operates the flight.” Members of the airlines of the various Atlantic Excellence Alliance were also able to earn elite status when flying the other carriers.
The Atlantic Excellence Alliance ended in 1999 when Austrian Airlines left for the Star Alliance and after Delta formed a partnership with Air France.
The three global airline alliances, in order of the number of airline members, are Star Alliance, SkyTeam and oneworld.

Why Align?
For the airlines, alliances were formed to increase profitability of the member airlines and for cost reduction when sharing sales offices, computer systems, maintenance facilities, catering, computer systems, operational staff and more, and the alliance feeds traffic to the alliance member. The basic concept behind global airlines alliances is that the member 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 governmental interference. The airline can also offer their customers the ability to seamlessly fly between countries.

For the flyers, the coordinated schedules, shared airport facilities and synchronized booking make worldwide travel more convenient. They can expect many easy-to-book destinations, shorter travel times as a result of streamlined transfers, a wider range of airport lounges and other elite benefits, a quicker route to frequent flyer program awards through earning miles into a single program from several airlines and convenient round-the-world tickets. One frequent flyer we got in touch with said, “My primary frequent flyer program affiliation is with an airline that does not offer flights from where I am located to destinations other than North America. With them being members of a global alliance, I can enjoy status benefits and earn and redeem points on almost all my global travel. This would not be possible to this extent otherwise.” Another flyer said, “It’s nearly impossible for me to do all my flights with the same airline. The fact that you can collect points on all airlines from the same alliance is a huge plus in this case. I would need too many different member cards without having a chance of reaching any status with any one of them if this would not be possible.”

Flyers can also earn mileage toward elite status in their chosen frequent flyer program when flying the other members of the alliance. Those unfamiliar with how alliances work sometimes believe they can combine miles between the various alliance members to redeem for an award–this is not the case.

All is not wonderful for alliances, however, and we’ve heard from many frequent flyers with sentiments such as, “It is an alliance when it raises the opportunity for sales, less so for rewards and even less so for problem resolution.”Another stated, “… alliance benefits are being diluted and there are some instances of non-aligned airlines offering just as much (e.g. Emirates and Etihad).”

Alliance Adjustments
All three global airline alliances continue to add members although the list of potential airlines for membership is limited. The process to become a member of a global alliance is detailed, takes about two years and is not always easy. The airline has a mentor airline in the alliance to help it through the process. Not all airlines make it through to a full alliance membership but a vast majority do.

Recent major changes to the alliances have come about because of mergers. The American Airlines and US Airways merger resulted in US Airways leaving Star Alliance to join oneworld as of March 31, 2014. In South America, LAN and TAM merged resulting in TAM leaving Star Alliance for oneworld, also as of March 31, 2014. In the past, Continental Airlines created a stir when it moved from SkyTeam to the Star Alliance in 2009. By March 3, 2012, Continental officially merged with United Airlines, a founding member of the Star Alliance. As early as 2008, Continental had announced its intention to join Star Alliance, which can now be seen as the precursor to the merger with United a few years later.

Three Global Alliances
For those 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 (if the terms of the program allow this). As you move up in status in your chosen program, you will gain elite status in the global alliance opening up lounge access and other benefits worldwide.

The smallest of the three alliances, oneworld, was launched in February 1999 by American Airlines, British Airways, Cathay Pacific and Qantas. Finnair and Iberia followed in 1999, LAN in 2000, Japan Airlines and Royal Jordanian in 2007, S7 Airlines in 2010, airberlin in 2012, Malaysia Airlines and Qatar Airways in 2013 and TAM Airlines, US Airways and SriLankan Airlines in 2014. Affiliate airlines include NIKI, American Eagle, Dragonair and more, offering regional service for member airlines and the transatlantic premium service carrier OpenSkies. The most recent airline to join the alliance was SriLankan Airlines, which joined the alliance May 1, 2014, expanding oneworld offers to Sri Lanka, the Maldives and a significant presence in southern India. The alliance currently has 15 member airlines–12 less than the Star Alliance.

Oneworld does not offer flight upgrades for flights operated by other oneworld members, which is seen as a major drawback by many frequent flyers.

oneworld Status
As you reach status within your frequent flyer program, you will have matching status in the elite program of the airline alliance. In the case of oneworld, there are three status levels: Ruby, Sapphire and Emerald.

Ruby – Offers priority business class check-in, preferred seating (where offered), priority standby and waitlisting. Oneworld lounge access is not offered to Ruby members.

Sapphire – Offers all the benefits of Ruby status, plus preferred boarding and access to business class and frequent flyer airport lounges (with one guest) when traveling internationally, regardless of the class of service flown that day. (“International” does not include North American itineraries within or between the U.S., Canada, Mexico, except Mexico City, the Bahamas, Bermuda and the Caribbean.)

Emerald – Offers all the benefits of Ruby status, plus priority first or business class check-in, extra baggage allowance, fast track security at select airports and access to more than 600 lounges (with one guest) when traveling internationally, including first class, business class and frequent flyer lounges, regardless of the class of service flown that day.

oneworld Benefits
The coverage in North America, Europe, Middle East, South America, Australia/New Zealand is strong and with the addition of SriLanka Airlines, the Maldives, a very popular resort destination is available. Members enjoy round-the-world flights with one member stating, “They [round-the-world flights] provide cost-effective flexible long-haul premium cabin travel.”

Oneworld has also won several “Best” titles including from Skytrax, Business Traveller, Premier Traveler, World Travel Awards and Air Transport News.

oneworld Drawbacks
Oneworld does not have an airline partner in mainland China or India and the coverage to Africa is weak. Yes, you can get to Africa with British Airways but you might also get slammed with British Airways’ notoriously high award flight surcharges.

One oneworld flyer stated, “oneworld has such limited options to Europe compared to Star Alliance” and mentioned that the alliance should allow “cross metal upgrades and drop the ridiculous fuel surcharge on British Airways.”

Oneworld members also report that they’ve noticed less availability in certain cabins. Others complain that too many rates do not qualify to earn miles.

oneworld Tips from Frequent Flyers
British Airways offers 2-for-1 deals (via Chase in the U.S. and American Express in the U.K.) for those who meet the minimum spend. This can halve the miles needed to redeem for an award (if you can do it all on BA metal). British Airways Avios are also pretty good for short flights on oneworld, especially on American Airlines.

British Airways awards are great for flights within Europe with Reward Flight Saver.

Book international first class trips well in advance at off-season times for Qantas, Cathay and British Airways.

If oneworld Emerald, enjoy the first class lounges while they last. More and more first lounges are being converted to joint business/first/elite lounges.

Take advantage of American AAdvantage off-peak awards to make your miles stretch farther.

If you book with a partner carrier, make sure you include your primary program elite status member number on the reservation so you can take advantage of boarding groups, seat selection, etc.

The youngest of the three alliances, SkyTeam was launched in June 2000 with Aeromexico, Air France, Delta Air Lines and Korean Air and currently has 20 member airlines. In September 2004, Continental Airlines, along with KLM and Northwest Airlines, joined the alliance. However, Continental left the alliance to join the Star Alliance in October 2009. In 2014, Garuda Indonesia joined as the alliance’s 20th member and its most recent member. SkyTeam has publicly mentioned that they are working to further strengthen their global network by looking for partners in key growth areas Brazil and India.

SkyTeam suffers from being considered the weakest global alliance as demonstrated in our recent poll. Just over seven percent of those responding said that SkyTeam is the strongest alliance while over 63 percent pick Star Alliance as the strongest. Oneworld falls in the middle at around 23 percent.

SkyTeam Elite
SkyTeam has a two-tiered elite program: SkyTeam Elite and SkyTeam Elite Plus.

SkyTeam Elite – Offers extra baggage allowance (10kg extra with the weight concept or one extra piece), priority check-in, preferred seating, priority boarding, priority reservations waitlist, priority airport standby and elite qualification miles.

SkyTeam Elite Plus – Offers all of the benefits of SkyTeam Elite status, plus an additional 10kg extra baggage allowance if the airline uses the weight concept, priority baggage handling, guaranteed reservations on sold-out flights (as long as you book at least 24 hours before departure and purchase a full-fare economy ticket) and lounge access for member and their guest.

SkyTeam Benefits
SkyTeam has added airlines in mainland China in recent years to shore up its presence in that emerging market and has bolstered the alliance in the Middle East and Southeast Asia. Frequent flyer SkyTeam program members can use their miles to upgrade from economy to business class on international flight itineraries on most SkyTeam member airlines including Aeroflot, Aeromexico, Air France, China Airlines, China Southern, Czech Airlines, Delta Air Lines, KLM and Korean Air. The number of miles necessary for an upgrade varies based on the frequent flyer program and the itinerary. You can use your miles for upgrades for passengers other than yourself even when you are not traveling with them. The downside to this is that you must purchase a full-fare economy class ticket.

SkyTeam Drawbacks
One of the benefits members of frequent flyer programs within a global alliance enjoy is the ability to spend their miles on aspirational airlines. SkyTeam falls short in this regard as the only alliance that does not have an airline member in Skytrax’ list of five-star airlines. Star Alliance features three airlines regarded as five star airlines: ANA, Asiana Airlines and Singapore Airlines. Oneworld has two five-star airlines: Cathay Pacific Airways and Qatar Airways; and Hainan Airlines has a codeshare agreement with American Airlines but is not a member of oneworld. Oneworld member Malaysia Airlines was also deemed a five-star airline but that designation is currently under review by Skytrax. Malaysia Airlines was rumored to be joining SkyTeam but instead joined oneworld on Feb. 1, 2013. As we mentioned above, SkyTeam upgrades are only available if you pay full fare.

SkyTeam flyers need to also pay close attention to some of the fine print, including priority airport standby for SkyTeam elite members is offered to SkyTeam Elite Plus members only on Korean Air and Delta offers a Same Day Confirmed standby for a fee. Regarding earning elite qualification miles on Sky Team flights, Air France doesn’t offer them on all of their flights, China Airlines offers EQMs on international flights of more than six hours (and on certain fares), Delta does not offer EQMs on Delta Shuttle and Delta Connection flights, even when connecting to/from an international flight and Aerolineas Argentinas offers this benefit only via their call center.

SkyTeam members report that they do not feel the individual airlines in the alliance always act as if they are part of an alliance. One flyer said, “They seem ambivalent about the alliance.” But blogger Rene of Delta Points seems to disagree with that assessment and says, “[SkyTeam] have been very successful as far as branding and consistency across the SkyTeam brand. I think they do a better job than the other alliances of having homogeneious services throughout the partners.” Others complain that it’s difficult to get an award seat.

SkyTeam Tips from Frequent Flyers
Use your SkyMiles for flights on Virgin Atlantic.

Join AIR FRANCE / KLM Flying Blue where you can upgrade to A380 first class and get the spectacular first class lounge experience–it works with any Flying Blue elite level, you do not have to be Platinum to do this.

Strive for Lifetime Elite on Korean–it’s the easiest to obtain and good access to first class award redemptions.

Be careful about internal Europe flights–Air France has been shifting them to a low-cost subsidiary with limited or no mileage earning on those flights.

It’s a good idea to call the partner airline you’re using for a flight directly to double check seat assignments or special requests. You can also usually get a quick response with a Tweet if you run into problems.

Always take your status membership card with you when you are flying partner airlines–you never know when it will get you a special service or fees waived or you might need it to access a lounge. (Take a picture of all of your elite loyalty cards to store in your phone.)

Star Alliance
Star Alliance is the largest alliance in terms of member airlines (27) and the most popular among flyers. The alliance was founded on May 14, 1997, with five airlines: Scandinavian Airlines (SAS), Thai Airways, Air Canada, Lufthansa and United Airlines. VARIG was the first airline to join the original five, adding reach to South America. Ansett Australia, Air New Zealand and ANA joined in 1999. The 2000s have seen growth in the alliance, strengthening its reach in Asia, Europe, Africa, the Middle East and South America. Star Alliance lost US Airways with its merger to American Airlines in March 2014. Air India was the most recent airline to join on June 24, 2014.

Star Alliance Elite
Like all global airline alliances, Star Alliance offers an elite status level for those members who earn elite status in their chosen Star Alliance member airline frequent flyer program. There are two status levels in Star Alliance: Silver and Gold.

Star Alliance Silver Status – Offers priority reservations waitlist and priority airport standby.

Star Alliance Gold Status – Along with priority reservations waitlist and airport standby, offers priority airport check-in and boarding, extra baggage allowance (20kg or one extra piece), priority baggage handling and airport lounge access for Star Alliance member and one guest regardless of your class of travel.

Star Alliance Benefits
More choices to earn and burn your frequent flyer miles than any other alliance. Several “aspirational” airlines are members rated as five star by Skytrax so members can spend their miles in style. Star Alliance upgrade awards are available to upgrade one class of service on all Star Alliance member airlines and you do not have to purchase full-fare tickets to get the upgrade. You may also redeem miles for up to four people who are traveling on the same itinerary. You may also redeem miles for an upgrade for any other person and they do not have to be traveling with you.

Star Alliance Drawbacks
As with all alliances, and all frequent flyer programs, you should pay attention to the small print. Not all booking classes are available for Star Alliance upgrade awards and two airlines, ANA and Ethiopian Airlines, request you make upgrade requests eight weeks before departure compared to 331 days prior to departure for the other Star Alliance carriers.

You must also pay close attention to the fares that earn miles. One Star Alliance flyer stated, “Lufthansa, for example, now only lets you earn 100 percent miles on the top three or four economy fares … it’s really way too complicated.” Another Star Alliance flyer said, “Star Alliance is not good about spelling out mileage earning fare classes when you book … They should ALWAYS provide this information when displaying flight options and, when applicable, indicate the lowest fare for earning 100 percent credit. Another drawback mentioned by members is the inconsistency of elite recognition across the alliance. “For example, the Star Gold extra baggage benefit now only applies to some fares, which means airlines can choose not to provide the benefit (e.g. Air New Zealand).

Star Alliance Tips from Frequent Flyers
Close-in booking is usually pretty good. Most Star carriers seem to open up award space at the last minute.

Aeroplan, despite the surcharges, gives much better availability than United.

Earn Gold status for international lounge access.

Look at the different airlines. They have different ways of calculating miles for the same flights and more importantly, the target points for Silver and Gold status can be very different for different member programs.

Lifetime Diamond Plus on Asiana (now that Aegean has applied requalification requirements).

Fly on other than U.S.-based airlines!

The “Others”
Some major airlines have chosen not to join a global alliance. Recently, a Reuters news report mentioned that the head of Etihad Airways says that the global airline alliance is a “fractured” model and that his airline will seek to grow via equity stakes and codeshare deals. Etihad currently has a stake in eight airlines including airberlin, Aer Lingus, Virgin Australia and Alitalia. Not long after the comment about the fractured models of global alliances, news from Etihad included the creation of its own alliance, Etihad Airways Partners.

Etihad Airways Partners includes airberlin, Air Serbia, Air Seychelles, Jet Airways and Darwin Airlines. The benefits will include standardized mileage and tier benefits across all partners, priority services and no blackout dates. As demonstrated by the inclusion of airberlin, a oneworld member, an airline can be a member of Etihad Airways Partners even if they are also a member of another global alliance (something other global alliances do not allow).

According to James Hogan Etihad’s president and CEO, the new alliance will, “remove the complexity and confusion that exists within in the global alliances.” In the future, all Etihad Airways Partners customers will be able to earn and burn across all partners and the elite programs will be consistent between all of the partner airlines (e.g. Silver, Gold, Platinum).

Emirates Airlines is another airline that has chosen not to join a global alliance. In 2000, the airline briefly considered joining the Star Alliance, but opted to remain independent of the three global airline alliances. Tim Clark, president of Emirates, has been quoted likening the global alliances to “gang warfare”, threatening to stifle competition. “I’m so opposed to alliances because I believe they distort and channel and direct for the greater good of the alliance thing, rather than the consumers that are driving it all.” With the new Etihad alliance, there are those who are wondering if this will prompt Emirates to announce its own global alliance. Another Gulf airline, Qatar Airways joined the oneworld alliance in 2013.

Virgin’s Richard Branson has chosen not to join a global alliance but rumors have abounded for years that he might change his mind. As of Jan. 1, 2014, Virgin Atlantic Airways (reluctantly) formed a close partnership with Delta Air Lines a couple of years after Delta acquired a 49 percent stake in Virgin Atlantic that had once been owned by Singapore Airlines (a member of the Star Alliance). Delta SkyMiles members can earn miles on Virgin Atlantic flights including Medallion Qualification Miles (MQMs) on eligible Virgin Atlantic flights. Elite members of SkyMiles also receive Medallion benefits when traveling on Virgin Atlantic flights such as priority check-in, baggage handling, security and boarding. An additional free checked bag is offered and SkyMiles members can access Virgin Atlantic Clubhouses at select locations. Although the two airlines have close ties, the frequent flyer programs remain separate and members cannot pool currency from both programs into one, and currently neither program offers a status match for elite status members.
Delta is a member of SkyTeam but Virgin Atlantic is not and there have been no recent rumors that the marriage between Delta and Virgin Atlantic will result in SkyTeam membership for Virgin.

Even though the market has forced Mr. Branson to team up with another airline, he would have preferred his airline to stand on its own, “The regulators in their wisdom have decided to create a number of very big alliances,” he said. “My instinct is that competition brings better fares and quality than cooperation.”

Another airline that has chosen to make its own way is Alaska Airlines. Although this airline has never joined a global alliance, it has a strong partner network including mega partners American Airlines (oneworld) and Delta Air Lines (SkyTeam). Other partners include Aeromexico (SkyTeam), Air France/KLM (SkyTeam), British Airways (oneworld), Cathay Pacific (oneworld), Emirates (no alliance), Fiji Airways (no alliance), Korean Air (SkyTeam), LAN (oneworld), Qantas (oneworld) and regional carriers PenAir and Ravn Alaska. Because Alaska is not part of an alliance, you won’t find the elite reciprocity you’ll find among alliance members, although some benefits are available for elite members when flying American and Delta.

If you’re counting partners according to the alliance, you’ll notice that five of Alaska’s airline partners are from oneworld and four are from SkyTeam, with none from Star Alliance. But the bigger question for Alaska Airlines these days is not what alliance they might join (if they choose to join an alliance), but probably which airline they might merge with.

Which Alliance is Best?
Global airline alliances do not offer a one-size-fits all. Just because the Star Alliance is the largest alliance, does not mean it’s the best fit for you. When looking at an alliance, take into consideration your travel patterns and plans. Do the airlines fly to the areas you wish to fly? Does the alliance have a good reputation for allowing award seats on the routes you wish to fly? How can you earn miles between the partners–some airlines are more restrictive than others when you fly discount economy class, for example. Before inputting your payment information for any flight, be sure to check the fine print to see if you will earn the miles you’re expecting to earn.
As already noted, the Star Alliance continues to be the preferred global alliance by most frequent flyers, and as the largest alliance, that’s not surprising. In our recent survey, we also asked, “If an airline does not belong to a global alliance…” 68.5 percent said, “… the frequent flyer program isn’t as robust” compared to 31.5 percent who said, “… it doesn’t matter.”
Regarding awards availabilty, we asked, “Which airline alliance do you feel offers the best award availability? Star Alliance once again came in first, with 45 percent, followed by oneworld at 25 percent. SkyTeam was a distant third at only 6.6 percent. The rest of those responding said they didn’t know which alliance was best for award availability. As one respondent commented, “Star seems better than oneworld and much better than SkyTeam.”

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