Airline revelry

Governments do it, so why not airlines? From APEC to NATO, EU to ASEAN, the world rests on alliances.

In 1997, a group of five world-class airlines got together to create something never seen before — an alliance that brought together networks, lounge access, check-in services, ticketing and dozens of other services to improve the travel experience for customers. They called it the Star Alliance network.

By 2006, the alliance had grown to 17 members, namely Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, THAI, United, US Airways and three smaller, regional members Adria Airways, Blue 1 and Croatia Airlines with two other international carriers in China scheduled to join this year.

According to Christopher Zimmer, Lufthansa GM in the Philippines, about 70 percent of all airlines in the world are under an alliance, and Star is the biggest of those alliances. In fact, it calls itself, “The airline network for Earth.”

That simply means the alliance has a presence in all hemispheres, north and south of the equator.

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The reason behind an alliance is as clear as a cloudless sky. According to Paul Schenk of Swissair, who has been in the Philippines for 10 years now, “from an airline’s point of view also, when it comes to bargaining, it gives you bargaining power. You negotiate as a group.”

For Jane Cortez of bmi, the proof of the pudding is in the pooling. “A definite advantage of the alliance is pooling of resources and moving together as one to counter other competitors,” she points out.

Diva Abad Santos, also of Air Canada, agrees. “The Alliance to me is very important because aside from contributing to the revenues, it’s really for awareness. Because of the Star Alliance, airlines are more visible. And then we have Star Alliance products that we sell. We have the Star Alliance minimum around-the-world fare, we have so many other products, air passes. So these are things that when we go out and sell, or when we conduct product seminars, we inevitably mention all these things. And they elicit interest.”

The Philippine STAR (another star!) was the guest of the alliance during its 10th birthday party (its 10th anniversary actually falls on May 14) at the Tower Club, and one senses the camaraderie among the GMs and marketing staff. No airline turbulence here.

Does friendship get in the way of business and vice versa?

“No,” says Lea Gamboa of Air Canada. “On the contrary, it enhances our business relationship. We support each other and talk about market and competitive information among each other as though we were gossiping about other people’s lives! It makes our job easier as in the marketing field, these pieces of information are vital for our survival.”

Malu Duenas of Thai Airways, one of the original member airlines, adds: “There is a coined word I recently came across — ‘coopetition,’ which is a blend of ‘cooperative competition,’ which is best exemplified by the Star Alliance. Though our foremost priority would still be our individual airline revenues, ‘coopetition’ enables Star Alliance carriers to have a greater sense of togetherness and teamwork.”

Kate Vitales of US Airways and Jane Cortez of bmi give these points to ponder on. “People who are in the same line of business develop friendship because they understand each other; they may even help one another by sharing ideas and inputs about matters in the business. In the event that friends are in the same line of business, this would only ensure healthy competition that would challenge each individual to do his best in order to keep up with the standards of the other.”

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Asiana Airlines GM Tae Yup Kim, one of the newer airline members, says he took time to evaluate all other alliances before finally deciding to join Star.

It has been especially beneficial for him. In the Philippines alone, Asiana has really taken off, from three flights a week when it started to 28 flights a week now. He is proud to say that next to the balikbayans, Koreans constitute the biggest number of visitors to the Philippines. To him the alliance is “a marketing alliance.”

Francis Juico says being a member of Star has been very good for British Midland Airlines. “The reason why we’re with Star is as they said, we need partners. You can’t do this all by yourself. The bmi is a pretty small airline, flights are gonna be joined with United Airlines. So in a sense that’s how the alliance works out. You have big, small airlines able to get together without any changes in shareholding. In the world of cost-cutting, you can get around by having other people do certain things for you.”

For Madel Martin of United Airlines, the Star Alliance has benefited the Filipino, who is traveling abroad more and more. Getting an airline seat to any destination on earth has become easier because of the alliances between airlines.

“With the peso getting stronger, more people can now afford to travel. Not to downgrade local tourism, but it’s cheaper to go abroad than to visit some local destinations. And you know the connotation for Filipinos who are able to say, ‘I went abroad, I had my vacations abroad.’ It’s prestigious.”

Ten years is enough time to know whether it is wise to stay in a relationship or not. In an alliance, with men and machines as partners, 10 years is more than enough time to know that the partnership makes you take off... and enjoy the ride.

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