Is Star Alliance looking to achieve a certain size?
Star Alliance has grown from five founding members to today’s membership of 28 world-class carriers. We’ve never tried to maximise numbers. Instead, we developed our white spot strategy with the customer in mind or, more precisely, the frequent international traveller. This is our target audience and we listen closely to what this valued group is telling us. Our question was simple: Where do you want to fly? Then we compare that with the network coverage we already have in each region.
How does alliance membership impact individual airline’s route development?
As airlines enter Star Alliance, interline traffic between member airlines normally multiplies. We see them adjust their schedules to facilitate these traffic flows. They typically increase flights to their partners’ hubs, thus building more of the coveted hub-to-hub flights.
By aligning timings with the bank structures of their partners, with particular focus on top connecting flights, they offer shorter, smoother connections. Plus, by dovetailing departure times on high frequency routes they offer customers good options. Finally, new spoke routes become viable from a member’s hub, as normal local demand is boosted by the new feed from the alliance partners’ flights.
What are the complexities for alliance members of competing against each other, while also working together?
True, our members are competitors and partners at the same time. Part of our alliance mission is that we shall provide value beyond each member’s individual capabilities. In instances where a single member cannot provide what customers demand, but we can collectively, then we have a case that benefits everybody. Here are two examples: satisfying passenger demand for custom built Round The World tickets can only be done by working together. As an alliance we provide access to our combined our route network, whereby 4,000 aircraft serve 1,200 destinations. We give our customers a multitude of choices about how to build their own trip at attractive package prices. The logic for airport lounges is similar – replacing several small, under-utilised lounges with one spacious lounge that is open to all member airline customers, brings benefits to everyone.
Why is Africa such a priority area for Star Alliance?
Despite being underestimated for many years, Africa has turned out to be one of the fastest growing continents, both economically and for air transport. We anticipated this and we are happy to have three African members in our ranks (SAA, Egyptair and Ethiopian). They each bring strong home markets and well located hubs in the north, central and east and south of this amazing continent. On our network travellers can access Africa not only from Europe, something we do exceedingly well with member airlines such as Lufthansa, Brussels Airlines, TAP, Swiss or Turkish, but also direct from Asia and North and South America.
Can you tell us more about your aims for India and China?
As a global airline alliance we must be present in these economies. All BRIC powerhouses (Brazil, Russia, India, China) have naturally been on our radar and we’ve made good progress. Apart from Russia, where the search for suitable members continues, we are happy that we’ve been able to recruit Air China, Air India, and TAM Airlines.
How have your management structures changed since 1997?
The founders of Star Alliance recognised that setting up something so innovative would require serious investment. In the initial years, lots of money, resources and management time went into establishing the brand and processes. Since then we have steamlined things and are now effectively running the alliance at triple its initial size, with much fewer resources. Our Frankfurt-based management team is about 70 strong, recruited from 25 nationalities.
This article is featured in Routes News 2010 Issue 6
