Ordinary Gweilo

I used to think that airline alliances (and particularly code sharing) were just an evil trick played by the airlines.  After all, who wants to book a flight on Cathay Pacific only to discover that the flight is actually operated by a “partner”.  And when most of the flights on a particular route are operated by one of the global alliances (e.g. Oneworld for Hong Kong to London or Australia), can that really be good for customers? 

On the other hand, if you are a frequent flyer there are obvious advantages to these alliances.  If you have managed to get Silver on Marco Polo (Cathay’s program) you also get certain privileges with other Oneworld airlines (but no lounge access), and you can earn tier points (needed to get or retain your status in the Marco Polo club).  But, of course, that’s only worth anything if there are other airlines in the same alliance that you might be able to use, which is why all of them try to be global.

Right now there’s a battle going on to get the ”new” (post-bankruptcy) JAL to sign up for one of the alliances.  JAL is currently in Oneworld, but they are being wooed by Delta, who want to bring them in to SkyTeam (which includes Air France-KLM, Korean Air, China Southern, and, coming soon – try to contain your excitement – Vietnam Airlines).  As the Financial Times points out (Rivals want Japanese airline to come aboard):

If JAL abandons Oneworld it would leave Oneworld with just one large member in Asia, Hong Kong-based Cathay Pacific. This would mean both Star and SkyTeam were stronger in mainland China and Japan, two of the most critical markets in the region. It would also hurt American’s position on lucrative transpacific routes.

I’m not sure how JAL switching to Sky Team has any impact in mainland China – and Cathay probably benefit more from JAL’s problems than they would lose from a weakened Oneworld.

Anyway,  there has been talk about BA and American making offers to entice JAL to stay in Oneworld, but these seem not to amount to much (Absurd weasel words and useless figures from ‘oneworld’ about Japan Airlines), and you have to question how much any airline would want to spend on supporting a rival.  American’s other strategy is to hope that regulators would object to Delta and JAL’s share of the US-Japan route – whilst conveniently forgetting Oneworld’s own dominance on other routes.

One airline that does provide some competition to Oneworld on the London – Hong Kong – Sydney route is Virgin Atlantic, which isn’t a member of any of the big alliances.  Instead it has arrangements with various carriers, notably Singapore Airlines (owner of 49% of Virgin), which even allow you to earn tier points as well as mileage.  And Virgin generally offer more mileage (both for flights and from hotel and other partners), and they set lower tariffs for reward flights (Hong Kong – London in Business Class is 120,000 miles on Cathay/BA, but only 100,000 miles on Virgin).  So it does seem that alliances are not good for the consumer.

Of course Cathay can get away with having a less than generous frequent flyer program because of their dominant position in Hong Kong – they may face competition on most routes, but no airline (or even alliance) comes anywhere close to offering the number of routes they have in and out of Chek Lap Kok.