By Grant Martin, Skift – Feb 06, 2019 11:00 am

Members of the Oneworld airline alliance met late last week in London to celebrate the 20th anniversary of the partnership and kick off new initiatives for the coming years. But for all of its rapid expansion, the alliance seems hesitant to welcome China Southern, China’s largest carrier, into its ranks. Instead, the alliance seems more interested in making China Southern a Oneworld Connect member, or a partner with limited benefits.

Oneworld is one of the three major airline alliances in the world, and holds carriers such as American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Qantas, and Qatar in its ranks. Throughout mainland China, however, the alliance hasn’t got a strong partner outside of Hong Kong-based Cathay Pacific.

According to Jens Flottau of Air Transport World online, during the meeting late last week, Ron Gurney, the CEO of Oneworld, shared that the alliance has “no plans” to add China Southern to its ranks in the near future.

That plan may prove disruptive for those bent on robustly expanding the alliance’s reach into greater China. Already, American Airlines owns a 2.76 percent stake in the carrier while Qatar owns another 5 percent. British Airways, a third Oneworld carrier, has also explored a joint venture with China Southern, though none of those talks have yet borne fruit.

Further speculation has been fueled by the Chinese carrier’s own alliance ambitions. Late last year, the carrier announced that it was leaving the Skyteam alliance to head out on its own. Between that move and the above investments, it seemed that the carrier was clearly on a trajectory to join Oneworld – but so far, no partnership has formed.

Instead, executives at Oneworld may be keen on making China Southern a Oneworld Connect partner. Launched last year, the Oneworld Connect product is a sort of “membership light” option that gives partners (and passengers) access to alliance benefits without fully joining the ranks. A passenger booked and flying on American Airlines, for example, could fly to Beijing on American and then transfer through to China Southern, a Oneworld Connect partner to complete the journey. Throughout, the passenger would earn frequent flyer miles and other benefits across the entire trip. Alone, however, a passenger booking directly and exclusively on China Southern wouldn’t get Oneworld benefits.

Already, other carriers are considering the use of Oneworld Connect. In November Alaska shared that it may take advantage of Connect in some geographies while Fiji Airways plans to become the first partner member starting next month. At the Oneworld meeting last week, CEO Rob Gurney suggested that carriers were clamoring to partner up as Connect members, while IAG’s Willie Walsh said that Aer Lingus was considering the role. If the top brass at Oneworld aren’t yet ready to let China Southern in the door, the Connect option may be a realistic alternative.

Sources: https://skift.com/2019/02/06/oneworld-stays-cool-on-china-southern-joining-alliance/

 

The alliance of airlines OneWorld, celebrated its 20th anniversary, the alliance is made up of several recognized airlines around the world, such as: American Airlines, Brtish Airways, and Iberia, among others, one of the main issues that were taken into account was the possibility of annexing China Southern which is the largest airline in China, however the company is not fully convinced that it has been a relevant step in its history.

Despite not having a strong partner in addition to Cathay Pacific in Hong Kong, the alliance has no plans to add China Southern to its OneWorld ranks.

The best option for the alliance is that the Chinese company to be part of the OneWorld connect product, where it only has a lightweight membership, which provides access to members without fully joining the ranks.

The agreements between both companies are still under evaluation for the next years.

 Risks:

  • The OneWorld Alliance doesn’t have a strong partner in the region other than Cathay Pacific, which limits the expansion of its market.

Benefits:

  • OneWorld, by joining with China Southern, could obtain higher revenues, since this company is the largest airline in China.
  • By joining China Southern to OneWorld connect, the alliance would maintain its entry fee, because it would be only to complete the trips, offering only a limited access without full control of the ranges.

 

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Author: leslie_venegas