Originally Posted by chongcao

To answer your question, my personal belief is that alliance will evolve with time. Someone will argue alliance is living the past and will become irrelevant. To some extend recent development seems to point to that direction. But, I would say the recent development only indicates one of the way alliance could evolve with the time. Whether it is strategic investment or JV, alliance will get stronger when core members deepen the ties and forge unbreakable JV or investment within. What we saw DL and MU invest in AFKL, and DL and AFKL invests in VS, are prime example how alliance can get stronger through these methods. Yes VS is not in Sky Team. But alliance has to evolve to allow airlines without membership participate through other means by ownership.

Airlines join alliance because they see the value of alliance. Alliance recruit airlines as they see the candidates provide value to the alliance.

So if airlines like EI or VS does not see any value in joining the team or the alliance, as the cost outweigh the benefits, I think it is natural for alliance not to offer membership.

DL realised this, thus we do not see West jet nor VS in any hurry to join Sky Team. A bilateral agreement with airlines in the sky team like AFKL, MU and others can support the virtual alliance of multilateral alliance. In the end, what West Jet and VS can bring to MEA, Garuda or Saudia?

Skyteam might get weaker as DL decided to impose its dominance outside the structure of the alliance. But a stronger multilateral alliance among DL, AFKL, MU, KE and few others actually make the airlines within more competitive. Skyteam has largely evolved with AF and KL's choice of partner through historical ties, like KL's involvement to bring CZ and GA onboard, or AF's effort to bring MEA and VN into the alliance. They do not bring anything to DL nor the alliance rather than opportunities. It fits in AFKL's narrative but not DL's.

So alliance has to evolve. Oneworld and Star are trialing tier system. Core members of alliance realise more corporation within are needed. So we will see alliance continue to evolve, members that does not contribute to alliance needs to be able to exit, members that provide maximum benefits to member airlines will continue make the alliance stronger. Specifically I think the choice for Oneworld is more integration among AA and IAG, more fostering of relationship between AA, IAG and JAL to safeguard the Japanese market. QF is a difficult story to tell. I think what QF sees itself as a outsider of the alliance but it does not have the dominant position of DL. If any airline would break away from Oneworld, it is not CX not QR, but QF. I think QF sees itself an irreplaceable asset so it can make demands while partnering with many airlines outside alliance. It does not really need anyone else due to the market condition downunder.

Alliance will grow stronger in an evolved form. It will depends on the core members to make it happen. At least in star, there is UALHNH working together, creating a small group within star. So star alliance is safe and will continue to integrate within among core members. Oneworld would rely on the breakaway of unwilling members and addition of willing hands, as well as the acceptance of QR by AA, which I think would be vital for Oneworld in coming years.

Originally Posted by AA2070

You misunderstand me. I am not staying that Doug should be versed in every facet of operating the company. What he should do - what his sole job is - is to foster the kind of relationships with partners and regulators that will enable AA to actually do business. Losing the LA JV was a failure of his responsibility on that front. The BOD may have thought they hired someone who knew how to run an airline, but its proving time and time again that he doesn't know how to manage, he doesn't know how to lead, and he doesn't know how to perform on anything other than financial metrics, and he's not particularly stellar at that, either.

Do you honestly think this would have happened under Arpey or Crandall?

Originally Posted by GrayAnderson

Strictly speculation, but where does this put American's Miami hub in the long term? I know that was being run as a gateway to Latin America, but how much of that was partnership traffic vs their own O/D?

Also, I think this exposes a real danger of the current "partnership" system that airlines have been relying on.

Originally Posted by upinsmoke

Hyperbole much? As best I can tell, LATAM has 8 daily flights into Miami: 2 GRU, 2 SCL, 2 LIM, 1 FOR, 1 EZE. The MIA hub will be fine. Not saying this is not a loss to AA, and they'll have to respond.?

Originally Posted by krzysz

AA has sent the worst and oldest aircraft they have to South America. With Latam as a competitor, I hope they will need to try harder.

Originally Posted by formeraa

It's hard to do big business deals in total secrecy.

Originally Posted by BlatheringPenguin

Yeah, I can tally more than $1mil in AA annual revenue just among people I directly know that is at risk of moving to Delta with LATAM leaving OW. That’s because of tickets booked on long haul AA to/from SA with LATAM connections on the end. Ticketing will now favor Delta-LATAM over AA-LATAM and, Even in cases where folks book two separate tickets, there will be a preference for maintaining status on the long haul carrier that gets you status on the short haul LATAM flights. Not saying that revenue disappears instantaneously for AA, but I expect it will drain away over a year or two after OW-exit.

Originally Posted by rowingman

Originally Posted by GUWonder

The same Chilean civil society groups that went against the AA-LA JV and won in the Chilean Supreme Court may do so against DL too if DL tries for much the same thing as AA-LA tried and were made to abort earlier this year.