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The Economist looks at the problems at SkyTeam

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There was an interesting piece on The Economist website a couple of weeks ago about the SkyTeam alliance, which is well worth a read. The link is here.

If you are a regular reader of Head for Points, you will already be familiar with some of the issues raised. I discussed Delta’s introduction of a ‘minimum spend’ rule to retain status here.

I have also touched on Delta’s recent refusal to award status miles for flights on Korean Airlines, which is a SkyTeam partner (in fact, possibly the best regarded SkyTeam partner) and Virgin’s unwillingness to join SkyTeam.

Unfairly or not, SkyTeam is generally seen as the ‘alliance of losers’. A quick look at the list of members will make that clear – you will struggle to think of an occasion you last heard someone rave about even one of them.

That said, I don’t agree with the thrust of the article – that looser relationships between airlines based on equity stakes will take over from alliances.

Has Etihad really benefitted from its investments in Aer Lingus or Virgin Australia? I accept that the airberlin deal is being integrated more deeply and is probably feeding Etihad decent traffic – but airberlin, for now, remains a oneworld alliance member. Aer Lingus doesn’t even fly to Abu Dhabi, so it is difficult to see what benefits Etihad gets. There has also been no move so far to create a single frequent flyer scheme around those airlines where Etihad is a minority partner.

Read The Economist piece and see what you think.

Comments (7)

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  • London Traveller says:

    Of all of Etihad’s investment decisions, buying 49% of Jat Airways (to be rebranded as Air Serbia) must be the most bizarre. Virgin Australia is interesting because Etihad, Singapore Airlines and Air New Zealand are all jostling for position by increasing their equity stakes and all three airlines have differing interests.

  • James says:

    I do not care what Emirates or Ethiad say about their partnerships, these partnerships are so limited and only benefit a few customers in limited locations on simple itineraries.

    What I the customer needs is Global Alliances where I can get from a continent to any other continent via one Alliance, where I can also earn and redeem miles across all members.

    • Rachid says:

      Actually, what we need as customer is easy access/ transfer accross regions with potentially different airlines.wether this is done through alliances or partnership, only the end is needed, we should not care the mean.
      I think alliances are alternatives for legacy airlines to do strong partnerships because they do not have the cash to get equity for lots of airlines, only way to garantee an airline remains loyal.
      Qantas could not have done that deal with Emirates with any others!

  • London Traveller says:

    I can see the logic of the Emirates/Qantas partnership in giving Emirates access to Qantas’ corporate and frequent flyer base and its domestic network but I fail to see what is transformative about Etihad buying stakes in Jat Airways and Air Seychelles when they offer so little in terms of network and revenue. The risks of failed investments must outweigh the benefits.

    • Rachid says:

      Well, I bet Etihad does not intend to leave Air seychelle a small player, neither JAT.
      they invested an airline at cheap price, and will conyribute to turn it into a medium size decent airline with good connections in their respective regions. Otherwise, today, yes if does not make sense! lets have the same discussion in 2 years….

      • Sir Stamford says:

        A good example would be Air Seychelles (HM) commencing their three weekly services between Seychelles and Hong Kong, operated with Etihad Airways. It would not have been commercial feasible for such a small airline like HM to operate routes like this one without the add-on traffic from Abu Dhabi and Etihad.

        Sir Stamford

  • creampuff says:

    Vietnam Airlines. I like Vietnam Airlines and I’ve flown on them a lot (rather unsurprisingly as I used to live in Vietnam).

    I think I’d actively avoid most of the others except maybe Korean or KLM.

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