As your plane begins its descent, the flight attendant comes on the intercom to thank you for choosing their airline, “a member of the One World Alliance.” One World Alliance? Sounds like a plot to take over the world. What is it? And more importantly, what does it mean to you as a traveler?
How about this scenario: You get to the airport and head to the American Airlines desk, because your itinerary has an American Airlines flight number. But the American Airlines agent tells you that you can’t check in with them—you have to go to the British Airways desk. They tell you it’s not really an American Airlines flight, but a code share flight with British Airways. What!? But didn’t your money go to American? What is this code share business anyway?
Does it seem like every time you pick up a newspaper that some airline is merging with another? Is that the same as code sharing or alliances? Again, what does this mean to you as a traveler?
Alliances, code sharing and mergers are all common in today’s turbulent airline industry. Let’s break these down and see how they relate to the passenger.
Mergers are the actual merging of two airline companies into one. This typically happens when one airline is either in bankruptcy or on the verge of bankruptcy, and they get bought by another airline. Sometimes it happens to strengthen the airlines and allow them to compete better.
Currently, Continental and United are trying to gain government approval for a merger that would make it the world’s largest airline. Northwest recently was taken over by Delta. In the past, American has gobbled up TWA. The merger list goes on.
So what does this mean for the consumer? It often means less competition, and therefore higher prices, at least initially on some routes. Also, for the first few months to a year after a merger, customers may experience difficulties as the airlines seek to merge systems. Trying to merge customer service centers and establish consistent policies are monumental tasks that usually have some hiccups along the way.
For the airlines, mergers mean the ability to streamline operations, save money, and add revenue. The Houston Chronicle, for example, reports that the Continental-United merger will eventually save the combined company more than $1 billion annually.
Alliances are basically airlines agreeing to work together on a substantial level with other airlines in an effort to extend their services and streamline operations. There are three major global alliances. The Star Alliance, anchored by United, Lufthansa, Continental and US Airways; Sky Team, anchored by Delta; and One World, anchored by American and British Airways.
For travelers, alliances often mean that you can get frequent flyer points on your favorite airline even though you are flying a different carrier. There are, however, lots of exceptions to this so you will need to read your airline’s particular policy.
In our next blog, we will tackle the very confusing subject of code shares. We’ll show you what they mean to you, especially when you check in for a flight or have problems with a flight.