Under what circumstances would an airline (especially those mentioned above) gain by staying out of an alliance, compared to participating in an alliance? PS-If any of these major airlines join an alliance, assuming there are no closeby competitors (as with Thai vis a vis Singapore) already in a given alliance, do you think these airlines would be more predisposed to joining OW, or one of the other 2 alliances?

Even though Thai is not happy about its competitor, Singapore Airlines being virtually in its back yard, it is losing business to Star Alliance (particularly Singapore) carriers that it might regain if it could stand alone, or is it still making more money in the alliance, even with SQ around?

In terms of Mexicana, did it not leave Star Alliance largely because of difficulties in its relationship with UA; was Mexicana actually making money or gaining in other ways (excluding its relationship with UA)? PS-If it stays separate from AeroMexico, could it join OW - especially with its close relationship with AA?

JL is the classic example of an airline that gains more by staying out of an alliance. It has a strong route structure and interlines with many different airlines; often there is no choice. JL is big enough to have little to gain in economy of scale in supply acquisition (one of the thing that alliances do for their members), has its own FF plan, and a solid passenger base. Yet it has talked about joining an alliance for years, so there must be some benefit. Lots of speculation about JL's strategy, so far they seem to be de facto part of all 3 alliances.

Mexicana left Star Alliance because it was not receiving expected benefits due to United's various actions and could not justify the cost of staying in the alliance because it would have been unable to partner with another US based carrier. In other words, it was cheaper for them to leave.

Emirates has explicitly rejected any notion of being in an alliance, I expect because of their long term plans. If they join in an alliance, they will have to deal with the arrogance of BA, AF, LH, QF, and others and EK is looking to become a direct competitor. Emirates is looking to become the next SQ and you don't get there by having an airline like Air France throw a fit every time you want to expand.

Alaska has openly rejected Oneworld's bids for years. They now are very married to several of both Oneworld and Skyteam members which are filling lots of gaps while AS expands its network.

The Chinese airlines know that the rest of the world needs them as much as they need the rest of the world. Consequently, they are taking their sweet time in making any decisions. No doubt the government is influencing some of these decisions and that there is some skepticism as to whether an alliance is necessary. The ultimate answer will be yes, but if it was so clear then *at least one* would be allied by now.

Dragon doesn't want to pay the fees of an alliance and doesn't see any benefits coming out of it.

Virgin chooses to be a slut and I can't imagine Sir Richie allowing a bunch of continentals telling him how to run his airline.

Iceland Air sees no benefit.

Sabena got so burned from Swiss Air's cockup, which effectively reduced Sabena to a regional and Belgian-African connector, that they are rightfully skepical about getting into another alliance.

TAM right now I have been been told is waiting for a bit of a shakeup in the Brazilian air market. Varig isn't healthy, nor is TAM though healthier than Varig, and Lan is already thinking of making Brazil its next victim. Oneworld most certainly will have second thoughts if this is the case, though it could be worked around with a large capital investment in exchange for ownership and control.

Air India has explicitly said no alliance. They see no benefit, they see rising costs, and they see a virtual lock on the Indian market in their current position. Maybe that will change with more north american flights starting up, but they are still a dominant enough player not to need all that much help. They have internal issues to deal with before taking on more external ones.

And so on. No, not every airline wants to be in an alliance or they would be. Joining an alliance is a two way process. Like any sales transaction, you need to have a willing buyer *and* a willing seller. I also agree with many others that having a 20 member alliance isn't always a good thing. It's hard enough to get seven to agree let alone 20. A few more would be useful, but not to the extent that Star is growing.

All Nippon (NH) doesn't have the scale of international network that JL has. NH needed Star Alliance and NH has publicly stated Star has brought in hundreds of millions (of yen) in revenue far outweighing the PR cost NH bears for Star in the Japanese market.

NH is essentially a domesitc airline and it has been scaling back international operations with the exception of their exposure to the China market.

I think JL has codeshare arrangements with all those partners in oneworld, Star and SkyTeam that just meet their customer demand and doesn't see the need so much to stick to one group.

In terms of the Indian market, there is Indian Airlines, Jet, Sahara, and other airlines planning to join the market. These other airlines are starting to expand to international destinations. There is a thought that with Jet codesharing with UA, it may eventaully join the Star Alliance. I guess that if one airline joins at least one alliance, other airlines (including Air India) may join the competing alliances. I suspect the same principle may be valid for the Chinese market.

In view of your insight, do you project that OW will add any major world airlines within the next year, or so - even though at best that would be an educated guess?

I can forsee Air Sahara in OW. They appear to already have some sort of a preliminary agreement with AA and BA and are supposedly in talks with CX. Since the other OW carriers do not serve India, I guess everything will just fall into place with them.

Hi,

I think most of the points have already been covered but a huge problem for oneworld is Heathrow and the fact that the competitors (Star alliance and Virgin) have been extremely successful with the regulators. Every time an airline wants to join Oneworld the regulators demand Oneworld (BA) or the joining airline to give up landing slots to the competitors at Heathrow. BA is for obvious reasons unwilling to do so and so is the candidate airline as XXX-LHR is probably its most profitable long-haul route with lots of business travellers. Star doesn't have such a bottleneck, nor does Skyteam.

/hv

I have been intrigued by the regulators going after OW in terms of LHR, but after Star Alliance in terms of Frankfurt, or after Sky Team in terms of Paris, Amsterdam, or Rome. In USA, how can the regulators state that OW's AA/BA will have too much of some of the major airports' transatlantic (to England) business, but do not say the same thing to Star Alliance's UA/US/LH regarding traffic to Germany, or Sky Team's Air France/KLM/Alitalia along with Continental/Northwest/Delta traffic to Paris/Amsterdam/Rome.

The very simple answer is that LHR is regarded as being more important/significant than FRA/CDG/AMS. They seem to forget that BA have a much lower of the percentage of slots than, to name just two, LH at FRA and AF at CDG.

In defence of the regulators, they do not object to a monopoly per se, they consider how significant said monopoly s within the wider picture.

The big difference is that France , Germany and the Netherlands ( and I think Italy as well ) all have open skies agreements with the USA so there is no restriction (other than finding available slots) on additional US carriers entering these markets to boost competition - as we know Bermuda II limits LHR to two US carriers UA and AA ( or their "corporate successors" should one of them go chapter 7 ) therefore the US sees quite a major anticompetitive threat in the alignment of AA/BA

Is it currently impossible to get a landing slot to Paris, Amsterdam, Rome or Frankfurt as it is to Heathrow? If an (US) airline can actually open a route to say Amsterdam by just starting it, the authorities can't really demand anyone to cancel any routes because of alliances. If the competition just isn't there because no one wants to enter the market, there is little the regulators can and will do. LHR is a different matter as almost every airline would like to increase their daily flights there.

/hv

In terms of the US airport hubs, does any of the 3 alliances have well over 50% of the transatlantic business. What I am trying to figure out is why the US does not give AA/BA antitrust immunity for a cooperative arrangement for transatlantic routes, but it is more than willing to give the transatlantic Star Alliance or Sky Team members, such legal protection?

If VS decided to join an alliance, wouldn't they join Star since SQ is also in Star?

Does Qantas still have some ownership stake in Air NZ. If so, here is one airline who owns shares in another airline, but the 2 of them are in separate alliances.

FGII, I can only guess since I have no idea what's up the sleeve of Oneworld. But I expect that at least two will be added within a year and there is speculation that many more will be. Besides Air Sahara, I expect Air China and Malev. I would personally like to see Qatar and MAS thrown in. Both are moving in very positive directions with their products.

As far as Bermuda II and why regulators don't question non BA/AA, it is a very big point of contention with many airlines. I believe it can be summed in two words. Kennedy and Heathrow. AA and BA own an enormous portion of this route that is only served by four dominant airlines and a couple of minors. The route is extraordinarily popular and profitable. Gatwick, although a viable alternative, has not proven to be in the same league. Unfortunately, regulators on both sides have balked at allowing any more of a marriage without concessions out of the fear that four airlines will effectively decrease to three. It also acts as an impediment to Virgin joining Star since it would then create two alliances with full control over the route. I doubt that Virgin would seriously consider it anyway. Like Alaska, Virgin has their partners and each has a distinct purpose.

I have no idea whether Qantas owns a stake in NZ still or not.

Francophile, I don't see Virgin getting much benefit out of joining the star alliance. It codeshares with Continental on the NY-LON route which it would have to drop and it has agreements with most of the major star carriers besides United, its most important competitor. Additionally, it codeshares with Delta and it codeshares with MAS, both of which would have to stop with joining the star alliance. You can earn miles on VS with most of the star carriers plus a few others so the only benefits would be lounge reciprocity and marketing under the star label. Branson doesn't need marketing because Branson *is* marketing. Virgin is Virgin and the world doesn't need Star to explain that to them. Richard will be more than happy to continue to inform the world and market his products without paying a load of cash to Star every year.