Captain_Anonymous
October 14, 2000, 10:32 AM
The "round table dance" has begun once more.... What would be the next merger now??
By GEOFFREY THOMAS
Qantas's Oneworld Alliance is in danger of breaking up after its biggest partner, American Airlines, said it intended to quit the group.
The move by American Airlines resulted from the breakdown in discussions between the US and UK governments over the airline's bid to form a tighter code-sharing alliance with British Airways.
US authorities had set as a condition greater access to landing slots for other airlines at London's premier airport, Heathrow, something the UK authorities and British Airways rejected.
British Airways has also been discussing mergers with airlines such as KLM, which is in an alliance with Northwest Airlines, a competitor of American Airlines.
Mr Peter Harbison, managing director of the Centre for Asia-Pacific Aviation, said the Oneworld alliance was breaking up.
"It is a very volatile situation, the alliance is fragmenting, it's effectively imploding," he said.
Qantas is putting on a brave face and officially saying it's business as usual for Oneworld.
But that business, says Mr Harbison, is very promiscuous, with airlines jumping in and out of bed with each other to gain short-term advantages.
In fact, not one major alliance that existed 15 years ago is in place today.
Even within Australia, airlines have swapped partners. In the early 1990s Qantas was a shareholder in Air New Zealand and teamed with Ansett on domestic routes.
All that changed when Qantas bought Australian Airlines in 1994.
It dumped Ansett and sold its 19 per cent holding in Air New Zealand in 1996, when that airline bought 50 per cent of Ansett.
Oneworld has already lost its founding partner, Canadian Airlines, which was absorbed by Star Alliances' Air Canada.
Mr Harbison noted that another Oneworld partner, Cathay Pacific, has long been a bitter rival of Qantas and the fragmentation of the alliance might result in the Hong Kong-based airline also looking further afield.
There has also been speculation in the past year that British Airways might divest itself of its 25 per cent shareholding in Qantas but most analysts dismiss this.
American Airlines is in discussions with the small Swissair-led Qualiflyer Alliance. If it joined that, Qantas and British Airways might look to the uncommitted US carrier, Continental Airlines, as a new partner.
Continental, after years in the doldrums, has been revitalised to become one of the US's most successful and profitable carriers.
While the Oneworld Alliance is breaking up, its arch-rival, the bigger Star Alliance, is moving from strength to strength.
There are 13 airlines in Star, including Ansett, Air New Zealand and Singapore Airlines. The group has a turnover of $119 billion.
There is also a significant equity tie-up between some members, with Singapore Airlines holding a 25 per cent stake in Air New Zealand and that airline having 100 per cent of Ansett Australia.
Many analysts have been sceptical of alliances, suggesting that in many cases airlines scrambled to join for fear of being left out.
"In many cases, these alliances have been mismatches," Mr Harbison said.
The West Australian
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By GEOFFREY THOMAS
Qantas's Oneworld Alliance is in danger of breaking up after its biggest partner, American Airlines, said it intended to quit the group.
The move by American Airlines resulted from the breakdown in discussions between the US and UK governments over the airline's bid to form a tighter code-sharing alliance with British Airways.
US authorities had set as a condition greater access to landing slots for other airlines at London's premier airport, Heathrow, something the UK authorities and British Airways rejected.
British Airways has also been discussing mergers with airlines such as KLM, which is in an alliance with Northwest Airlines, a competitor of American Airlines.
Mr Peter Harbison, managing director of the Centre for Asia-Pacific Aviation, said the Oneworld alliance was breaking up.
"It is a very volatile situation, the alliance is fragmenting, it's effectively imploding," he said.
Qantas is putting on a brave face and officially saying it's business as usual for Oneworld.
But that business, says Mr Harbison, is very promiscuous, with airlines jumping in and out of bed with each other to gain short-term advantages.
In fact, not one major alliance that existed 15 years ago is in place today.
Even within Australia, airlines have swapped partners. In the early 1990s Qantas was a shareholder in Air New Zealand and teamed with Ansett on domestic routes.
All that changed when Qantas bought Australian Airlines in 1994.
It dumped Ansett and sold its 19 per cent holding in Air New Zealand in 1996, when that airline bought 50 per cent of Ansett.
Oneworld has already lost its founding partner, Canadian Airlines, which was absorbed by Star Alliances' Air Canada.
Mr Harbison noted that another Oneworld partner, Cathay Pacific, has long been a bitter rival of Qantas and the fragmentation of the alliance might result in the Hong Kong-based airline also looking further afield.
There has also been speculation in the past year that British Airways might divest itself of its 25 per cent shareholding in Qantas but most analysts dismiss this.
American Airlines is in discussions with the small Swissair-led Qualiflyer Alliance. If it joined that, Qantas and British Airways might look to the uncommitted US carrier, Continental Airlines, as a new partner.
Continental, after years in the doldrums, has been revitalised to become one of the US's most successful and profitable carriers.
While the Oneworld Alliance is breaking up, its arch-rival, the bigger Star Alliance, is moving from strength to strength.
There are 13 airlines in Star, including Ansett, Air New Zealand and Singapore Airlines. The group has a turnover of $119 billion.
There is also a significant equity tie-up between some members, with Singapore Airlines holding a 25 per cent stake in Air New Zealand and that airline having 100 per cent of Ansett Australia.
Many analysts have been sceptical of alliances, suggesting that in many cases airlines scrambled to join for fear of being left out.
"In many cases, these alliances have been mismatches," Mr Harbison said.
The West Australian
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