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When Continental defected from SkyTeam to Star Alliance last month, United Airlines CEO, Glenn Tilton noted that the two airlines would be looking “to create a unique and competitive partnership extending well beyond a traditional code share agreement.”
This became more evident yesterday when the North Atlantic Star Alliance team of Continental, United, Lufthansa and Air Canada sought US Department of Transportation approval to “create a more efficient and comprehensive trans-Atlantic network for the carriers’ customers, offering customers more service, scheduling and pricing options.”
And the news doesn’t stop there: this is to establish “a framework for similar joint ventures in other regions of the world.”
As is obvious from the route maps below, the complementarity of route networks is almost as if the airlines had been planning this “merger” for years. On the US side, United works out of Chicago and Washington DC, Continental from New York’s Newark and Houston and Air Canada from the main Canadian cities.
On the other side of the Atlantic, the addition of a powerful London presence (from Continental), to add to United’s and the Star Alliance’s already strong Frankfurt hub, further enhanced by Lufthansa subsidiary, Swiss International’s Zurich and Geneva presence.
Continental: New York Newark and Houston hubs
Source: Continental Airlines
United Airlines: Chicago and Washington DC hubs
Source: United Airlines
Note: Blue lines UA; brown lines codeshares
The carriers are talking about effectiveness in late 2009. The proposal will certainly spark frantic activity in Washington and Brussels, not to mention other national competition authority headquarters. The approval process will not be rapid, nor will it be simple (and, after all, who knows who will be left standing by the end of next year, anyway!).
Air Canada: Toronto and Montreal hubs
Source: Air Canada
Lufthansa: Frankfurt, Munich and Dusseldorf hubs
Source: Lufthansa
Note: Also Swiss International: Zurich and Geneva hubs
The effect will be felt nowhere more solidly than in London and Fort Worth, where oneworld airlines, British Airways and American Airlines, are respectively based.
The impact for them, already contemplating a similar combination across the Atlantic, will be immense, if this application is approved and enters into force. It will certainly accelerate the thought processes. And one positive spinoff for the oneworld carriers may be that the momentum involved with this, following the Air France-KLM/Delta/Northwest SkyTeam moves, pushes regulators towards a more receptive attitude.
The benefit for regulators of having all of these teams lining up in waiting is that the potential overall balance is shifted – so that it almost becomes a condition of approval of the others that there is a similarly powerful oneworld grouping.
That does not help the European “outsiders”, and, as the world digests the potential impact of these near-mergers, there will be many non-European airlines – and governments – awakening to the potential exclusivity of these developments.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
