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IAG ( the parent company of BA / Iberia /Aer Lingus / Etc) CEO Willie Walsh is one of the biggest characters in commercial aviation and although we might not always agree with the direction he’s helped take BA (in particular) in over the last few years, his thoughts are always worth paying attention to. At the most recent Centre for Aviation Conference in Singapore, he had some interesting musings on the future of the industry, focusing on the relevance of traditional alliances in the future.
At the moment most major airlines still belong to one of three global alliances – Oneworld, Star Alliance, or SkyTeam. These partnerships offer a number of benefits to both the airlines and passengers (especially those with elite status!), but it seems that they might be beginning to fracture. Part of the reason for that is the new giants in the Middle East (Emirates and Etihad) eschewing the traditional alliances in favour of their own partnerships, groups and investments. Even Qatar Airways (which is a member or Oneworld) tends to be more interested in its investments in other airlines than its membership status.
The challenge from long haul low cost carriers like Norwegian and Wow might play a part too as it tends to focus minds on greater consolidation and more innovative cooperation between established airlines.
Have a listen to what Mr Walsh has to say on the topic in the video below:
— Centre for Aviation (@CAPA_Aviation) November 8, 2017
Personally, I found the strength and openness of the comments quite interesting. You don’t have to read too much between the lines to conclude that the IAG view on the future relevance of alliances is pretty negative. Quite how that will play out over the next few years I’m not sure, but I suspect we’ll continue to see greater cross-investment across the industry, perhaps more joint ventures like the transatlantic one between BA/AA//Iberia/Finnair, and perhaps in time a weakening of alliance benefits.
What would you like the future of the traditional global alliances to be?