The chairman of British Airways, Martin Broughton, is being given space by the consumer and technical aviation media abroad in which to claim that the oneworld alliance will split up if it doesn’t get its way over yet another demand to be allowed to fix prices in concert with American Airlines on the North Atlantic routes.
So, are we frightened yet? If oneworld, formed ten years ago by Qantas, British Airways and American, were to disintegrate it is debatable whether there would be enough adversely affected travellers in Australia to form a cricket team.
It has been next to useless for consumers. The promises of that launch, commonality and equality of frequent flier schemes, common product standards, seamless connectivity, and so forth, either never happened or lasted as long as a beer in a heat wave. Anyone who tries to connect to anything at BA’s hub at London Heathrow knows hell. Unless you are a commercially important passenger or CIP, almost any connectivity in any alliance at any large airport is about as seamless as running an obstacle course in full battle kit at an executive boot camp.
Australians who want connectivity in Europe fly in large numbers via Dubai, Bangkok or Singapore on non oneworld carriers that save them more than half a day of mindless stupidity at Heathrow. They specifically avoid the inconvenience of changing from one airline to another halfway around the globe. And they get to keep all the fare rather than share it with their alliance buddies. Just why Qantas and others were filled with enthusiasm for the notion that an alliance is good for them because they would get to give away part of their revenue has never been satisfactorily explained. Qantas does enjoyed benefits for its shareholders rather than its customers from commercial or joint services agreements with BA and AA, but these were over and above its oneworld arrangements and aimed at keeping other alliance and non alliance carriers at bay. And Qantas has arrangements with Star and Skyteam carriers too.
The BA chairman refers indirectly to the synergies of the failed merger bid with Qantas as being a little less than the £500 million it expects from its similar ambitions to merge with Spanish giant Iberia. Really? No-one in Qantas came near to quoting a $1 billion equivalent benefit from such a deal. The highest estimate by an Australian analyst was $700 million, which was totally unsupported by any credible calculations.
Alliances, whether oneworld, or Star, or Skyteam, have very little provable benefit to consumers, and exhibit no capacity to protect their members from the pricing power of aggressive and sometimes very successful non-aligned carriers, such as Emirates in the local market. But they do generate fees, management gab fests, and irrelevant alliance paint jobs that make plane spotters excited.
The prime reason they continue to endure are the very high fees the member airlines incur if they resign.