Future of Travel TFI

Strategy development and forecasting in aviation, travel and tourism

Future of Travel TFI


Airline Consolidation and Alliances

In 2003 the three global airline alliances combined had 29 member airlines; full membership now numbers 62 airlines (plus affiliates/associates).  Avianca Brazil is the latest airline to join one of the global alliances as it became the 28th member of the Star Alliance in July 2015.

At a glanceoneworld (1)SkyTeam (2)Star (3)
Daily departures13,81417,34318,500
Passengers (mill)557.4665.4641.1
(1) As at June 2016 (2) Summer 2016 (3) As at July 2016

2015 saw just one new global alliance member, Avianca Brazil joined the Star Alliance, while two airlines moved alliances – US Airways and TAM both moved to oneworld from Star as a result of airline mergers.  During the previous year only three new airlines had joined up with the global alliances; SriLankan Airlines to oneworld, Air India to Star and Garuda Indonesia to SkyTeam.

With the increase in bilateral agreements between carriers and with most major airlines of the major markets already members of one of the three global alliances, there are currently no definite prospective members lined up. All three alliances have been focusing on extending member benefits by creating value from existing networks. The Star Alliance is looking to expand its network reach with the launch of its Connecting Partner Model, whereby routes operated by low-cost and hybrid airlines will be able to connect to the Alliance network.

Relationships between global alliance members and non-aligned airlines continue to develop as the airlines focus on growing networks through partnerships.  Virgin Australia, for example, is not a member of a global alliance but maintains major alliances with Singapore Airlines and Air New Zealand (both members of the Star Alliance), Delta (SkyTeam), and with Etihad and most recently Hainan Airlines (both unaligned).  The picture of intertwining relationships is certainly not a static one.  For example Qantas (oneworld member) and Alitalia (SkyTeam) recently ended their frequent flyer relationship following an equity investment by Virgin Australia’s investment partner, Etihad Airways (both unaligned), which purchased a share of the Italian airline; Virgin subsequently announced a new codeshare partnership with Alitalia, later extended to include reciprocal frequent flyer benefits.

In China, Hainan Airlines is the last of the major airlines to remain unaligned.  In the Middle East, Qatar Airways is still the only one of the three main carriers to have joined a global alliance.  Emirates and Etihad are pursuing independent strategies, working with key partners and establishing codesharing arrangements which both cross alliances and connect with unaligned carriers.

Etihad, along with five other airlines – airberlin, Air Serbia, Air Seychelles, Jet Airways and Darwin Airline – has formed Etihad Airways Partners.  With a reported aim of improving networks and schedules and enhancing frequent flyer benefits, other airlines may join, even those aligned with one of the major alliances (airberlin is already a member of the oneworld alliance).

While the Low Cost Carriers (LCCs) are largely unaligned, two alliances have recently formed comprising these carriers:

  • In North Asia a group was formed in January 2016 by Hainan Airlines’ four subsidiaries Hong Kong Express Airlines, Lucky Air, Urumqi Air and West Air, named the U-Fly Alliance. U-Fly reports that in 2015 its four original member airlines operated 67 aircraft carrying 17.1 million passengers on 168 routes. The addition of South Korea’s Eastar Jet in July 2016 increased the Alliance’s reach to 197 destinations across Asia.
  • In the Asia Pacific region eight carriers combined in May 2016 to form a group known as the Value Alliance. The member airlines – Cebu Pacific, Jeju Air, Nok, NokScoot, Scoot, Tigerair Australia, Tigerair Singapore and Vanilla Air – report that they provide access to more than 160 destinations from 17 hubs across Australia, North Asia and South East Asia, and in 2015 collectively served more than 47 million travellers with a combined fleet of 176 aircraft. The Alliance will enable flights to be booked on services operated by any of the eight airlines from any member website, with the full range of service options available for selection in a single transaction.

A third regional alliance, the Vanilla Alliance was founded in September 2015 within the Indian Ocean region with Air Austral, Air Madagascar, Air Mauritius, Air Seychelles and Int’Air Îles as its members. The five airlines were reported to carry almost 3 million passengers yearly to more than 50 destinations on around 30 aircraft.

The current status of the three global alliances is shown in the table below.

World Airline Alliances as at September 2016


(14 member airlines)
Founding members: American Airlines, British Airways, Cathay Pacific Airways and Qantas Airways (1 February 1999). Canadian Airlines, also a founding member, withdrew June 2000.
Additional members: Finnair and Iberia (September 1999), LAN Airlines (May 2000), Japan Airlines and Royal Jordanian (April 2007), Dragonair (affiliate, November 2007), S7 Airlines (November 2010), airberlin (March 2012), Malaysia Airlines (February 2013), Qatar Airways (October 2013), US Airways (March 2014, from Star after merging with American Airlines), TAM Airlines (March 2014, from Star as part of LATAM Airlines Group), SriLankan Airlines (May 2014).
Former members: Canadian Airlines, after being purchased by Air Canada, withdrew from the alliance in June 2000. Aer Lingus (joined May 2000, left April 2007), Mexicana (joined November 2009, operations suspended August 2010), Malev (joined April 2007, operations suspended February 2012).
Star Alliance

(28 member airlines)
Founding members: United Airlines, Air Canada, Lufthansa, Thai Airways International and SAS-Scandinavian Airlines (14 May 1997).
Additional members: Air New Zealand (March 1999), All Nippon Airways (October 1999), Austrian Airlines Group (March 2000), Singapore Airlines (April 2000), Asiana Airlines (March 2003), LOT Polish Airlines (October 2003), Adria Airways and Croatia Airlines (December 2004), TAP Air Portugal (March 2005), South African Airways and Swiss International Airlines (April 2006), Air China (December 2007), Turkish Airlines (April 2008), EgyptAir (July 2008), Brussels Airlines (December 2009), Aegean Airlines (June 2010), Ethiopian Airlines (December 2011), Avianca-TACA Airlines and Copa Airlines (June 2012), Shenzhen Airlines (November 2012), EVA Air (June 2013), Air India (July 2014), Avianca Brazil (July 2015).
Former members: Ansett Airlines (joined March 1999, failed in 2001), Mexicana Airlines (joined July 2000, ended March 2004), VARIG Brazilian Airlines (joined October 1997, ended January 2007), Shanghai Airlines (joined December 2007, ended October 2010), Continental (joined October 2009, merged with United January 2012), Spanair (joined April 2003, ceased operation January 2012), bmi british midland (joined July 2000, ended April 2012), Blue1 (joined October 2004, ended November 2012), TAM (joined May 2010, moved to oneworld in March 2014 as part of the LATAM Airlines Group), US Airways (joined May 2004, moved to oneworld in March 2014 as part of merger with American Airlines).

(20 member airlines)
Founding members: Air France, Delta, AeroMexico and Korean Air (June 2000).
Additional members: CSA Czech Airlines (March 2001), Alitalia (July 2001), KLM (September 2004), Aeroflot (April 2006), Kenya Airways and Air Europa (associates September 2007, full members June 2010), China Southern Airlines (November 2007), Vietnam Airlines, TAROM (June 2010), China Eastern, including subsidiary Shanghai Airlines (June 2011), China Airlines (September 2011), Saudi Arabian Airlines (May 2012), Middle East Airlines (June 2012), Aerolineas Argentinas (August 2012), Xiamen Airlines (November 2012), Garuda Indonesia (March 2014).
Former members: Continental Airlines (joined September 2004, left October 2009), Copa Airlines (joined September 2007, left October 2009), Northwest (joined September 2004, merged with Delta January 2010).
Source: TFI Website based on airline sources.