Thai to leave Star Alliance?

Old Feb 16, 00, 6:23 pm
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Thai to leave Star Alliance?

Shuffling partners, airline alliances show their instability --
By Jay Campbell, Bridge News
New York--Feb 16--In the latest in a series of cracks to emerge in the airline industry's global alliance structure, Thai Airways appears ready to break from the Star Alliance. Executives at Northwest and Italy's Alitalia are claiming Thai will be going their way, but 2 other alliances could also be courting the carrier.
Alitalia CEO Domenico Cempella told the Italian ANSA newswire Wednesday that Thai could join the unofficially dubbed "Wings" alliance of Alitalia, Northwest, KLM and others, in the next 3 months. An Alitalia spokeswoman confirmed the accuracy of the statement. Meanwhile, Northwest CEO John Dasburg on Tuesday told De Telegraaf of the Netherlands that the Wings members were talking with Thai, and that its Bangkok

hub would be of strategic importance.
A spokesman for Thai Airways in Los Angeles said the airline is aware of the scuttlebutt about it leaving Star, but Thai "has made no official decisions yet."
The airline will be privatized this year. Airline alliances involve integration ranging from baggage handling agreements to joint ventures with immunity from antitrust law.
The 4 main global alliances have a mix of these, typically including a nucleus of 2 to 4 carriers and a number of other partners that share displays in computer reservation systems, known as "code sharing." While airlines often quote upwards of hundreds of millions of dollars in revenue such partnerships "generate," most observers believe the alliance game is more about stealing each other's passengers than generating new ones. For example, the integration of frequent flyer programs through alliances allows travelers to accumulate and cash in miles on partner airlines. A United frequent flyer living in Denver would try to fly partners such as Thai to maximize his miles--that is, as long as Thai is partnered with United. Thai had voted against the addition of Singapore Airlines to the 10-member Star Alliance, announced last fall. United Airlines and Germany's Lufthansa are Star's 2 biggest members.
"With Thai joining KLM/Northwest, one of Star's 'founding members' will have defected, setting a significant precedent," wrote Merrill Lynch airline analyst Candace Browning in a research note issued Wednesday.
But trading Singapore for Thai appears to have been a no-brainer for the Star Alliance. Although Thai was one of its founding members, Singapore Airlines is world-renowned for impeccable service.
Star also won a recent victory in Canada by helping member Air Canada peel Canadian Airlines away from the Oneworld Alliance, led by American Airlines and British Airways.
The Wings alliance has shown less stability than Star, although its nucleus of Northwest and the Netherlands' KLM have the oldest, most integrated and successful bilateral partnership around.
Northwest is a partner and part owner of Continental Airlines, but Continental and KLM have been unable to work out a close agreement. Also, KLM is not satisfied with the progression of its joint venture with Alitalia due to difficulty in establishing a broader presence in Italy.
Meanwhile, the alliance of American and British Airways remain handcuffed amid the vicious regulatory battle between their home nations.
Some suspect that it is actually Delta/Air France that would attract Thai Airways, since that alliance most badly needs an Asian partner.
In general, "the likely winner of any reshuffling is the currently weakest alliance, Delta/Air France." reported Browning on Friday. Browning will soon issue an update to her Alliance Index, which in the past has ranked alliances based on geographical network, market size, network density, regulatory freedom and financial strength.
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Old Sep 19, 00, 2:10 pm
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Thai Air is "very much a part of Star Alliance" and denies it will join a DL/AF alliance (Skyteam), according to a Thai Air spokeswoman.
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