Might Alliance Consolidation Be On the Horizon Too?
Jun 21, 2008, 1:16 am
#1
Original Poster
Join Date: May 2003
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Might Alliance Consolidation Be On the Horizon Too?
Just wondering today if all of the talk about airline consolidation might eventually include or lead to alliance consolidation too. 3 is not too many right now but imagine a world with DL/NW as one, UA/CO being whatever they are moving towards, AA/BA doing the same, and so on.
Just curious...
Thoughts?
Just curious...
Thoughts?
Jun 21, 2008, 2:18 am
#2
Join Date: Apr 2002
Location: MHT/BOS <--> World
Programs: AA Plat 2.8MM
Posts: 4,629
No, I can't see this happening.
Unlike airlines, we don't have too many alliances. 3 is a good number to maintain competition.
Many routes in the US are served by 10+ airlines (via hubs). This is more competition than is healthy for the industry. We need some consolidation to bring things into a healthier balance.
The individual alliances are each growing and each have decent global coverage with room for expansion. They is no real advantage to consolidation.
If everyone is in the same alliance, flyers have less incentive to fly any particular carrier. They would get benefits regardless of who they flew.
Alliances are most valuable when overlap is limited.
Unlike airlines, we don't have too many alliances. 3 is a good number to maintain competition.
Many routes in the US are served by 10+ airlines (via hubs). This is more competition than is healthy for the industry. We need some consolidation to bring things into a healthier balance.
The individual alliances are each growing and each have decent global coverage with room for expansion. They is no real advantage to consolidation.
If everyone is in the same alliance, flyers have less incentive to fly any particular carrier. They would get benefits regardless of who they flew.
Alliances are most valuable when overlap is limited.
Jun 21, 2008, 8:33 am
#3
A FlyerTalk Posting Legend
Join Date: Apr 2001
Location: PSM
Posts: 69,232
I agree that we are unlikely to see an alliance disappear. The current setup is actually pretty good for carriers in most regions of the world; any further consolidation would result in too much overlap.
Jun 23, 2008, 1:12 pm
#4
Join Date: May 2004
Location: formerly Gold now Diamond, formerly MSY, now LAX, formerly NW, now DL
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It is kind of lopsided with *A with so many more airlines than OW & ST. I wouldn't mind OW & ST merging, though I doubt this would actually happen
Jun 23, 2008, 7:01 pm
#5
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Join Date: Apr 2001
Location: PSM
Posts: 69,232
The number of airlines matters less than the coverage provided. And as the smaller carriers join up with the existing alliances I think that ST & OW will add more partners than *A as *A seems to have most of the world pretty well covered these days while ST & OW can add more without introducing direct competition amongst their members.