Change Your Altitude

Air France and Singapore Airlines to Codeshare: A Word on Alliances

Who knows what’s going on with airline alliances these days. Back in the late 1990s, when the concept was first introduced, it was touted as the future of international aviation travel.

And indeed for several years after it seemed to flourish as airlines continued to hitch their name onto the Star Alliance bandwagon and other major international alliances started to pop up such as oneworld, followed by SkyTeam.

And for years the alliance and their members thrived on depending upon the loyalty and requisite benefits of their various partnerships to get them by even through the tough times post 2001.

Though there seems to be a fracturing going on of late – airlines are beginning to reach out beyond their own alliances and even go big with non aligned airlines – the big case here being that of Qantas, a founding member of oneworld, sidestepping the alliance and getting in bed with Emirates (an arch rival of most airlines). Back then this was seen as an outlier – a case that wasn’t going to signal a shift in traditional alliance operations.

But perhaps that was somewhat misguided? Perhaps there are the beginings of a seisemic shift in the way airlines align with one another and questions of the relevancy of organizations such as Star, oneworld or Sky are now being asked.

The Scoop:

Hot off the heels of the surprise tie up between Lufthansa (LH) and Cathay Pacific (CX), today Air France (an LH nemesis) has announced that an extensive codeshare agreement will be signed and go into (relative) immediate effect with…Singapore Airlines (SQ) of all people.

Groupe Air France has announced that starting April 27, 2017, the airline will attach its airline code onto Singapore Airlines flights and SQ will do the same on AF operated flights within Europe.

Destinations that Air France will be attaching their code to will include Melbourne and Sydney in Australia, and three yet unnamed destinations in Thailand along with two more in Malaysia. While not yet confirmed, it’s rumored that the destinations will be Krabi, Phuket and Chiang Mai in Thailand and Kuala Lumpur and Penang in Malaysia.

In return, on the same day Singapore Airlines will attach their code on 10 AF operated flights within Europe and beyond. The destinations include cities all over Europe – Aberdeen, Bordeaux, Edinburgh, Lisbon, Lyon, Madrid, Marseille, Newcastle, Nice and Toulouse.

These are all destinations that neither airline fly to on their own aircraft as yet, so it’s a mutually beneficial outcome here. (It’s also interesting to note that many of these destinations are served by the likes of Emirates already – so one stop options just became more competitive on SQ and AF rather than any of the Middle Eastern airlines).

In their press release, Air France had this to say:

“This kind of partnership is part of our aim to expand our market position and increase our range of destinations for our customers all around the world,” said Patrick Roux, Senior Vice-President Alliances at Air France-KLM, in a statement.”

Both airlines have left the door open to further expand codeshare agreements between themselves or even extend towards other partner airlines such as KLM and Silk Air.

There are major questions looming over the future of global airline alliances and just how they serve their respective members. Image credit: AirwaysMagazine

The Takeaway:

There’s not much more than can be said about the bad blood between SQ and CX as the two major players in the South East Asia region, but it’s all the more astounding that Singapore Airlines – who is notoriously difficult to deal with in these situations – would choose to go with Air France rather than codeshare and align with their own Star partner Lufthansa.

If these two recently announced codeshare deals don’t show some sort of friction – a changing of tides in how traditional alliances work – I don’t know what will. Somethings afoot here and whilst we don’t exactly know what is what yet, we most likely will soon find out.

A lot of this has to do with the rise of the Gulf carriers. All four carriers mentioned in this post are vocal opponents of the operating structure of all three of Emirates, Etihad and Qatar. All four have seen their passenger and operational numbers drop along with their yields and competitiveness.

Initially they took the price gouging route – that would never work with any of those airlines. Emirates has so much capacity with such low operational costs with that A380 fleet whereas Etihad and Qatar are heavily subsidized by their respective governments. Their European counterparts have to deal with their very explosive union situations so are at an inherent disadvantae

So then they took the political route – especially with Air France and Lufthansa along with their respective partners in the United States Delta and United. The governments ruled in favor of a free market and as such – they lost.

So now they turn to go beyond alliances and actively ‘gang up’ on the big Middle East Three, foregoing traditional partnerships in the search for some sort of pragmatism in attempting to expand their global scope.

Whether this new approach will work is yet to be seen, it will be the passenger that decides ultimately.

One final word on the passengers: all this is also symptomatic of how the nature of the passenger has evolved since the beginning of the alliance system. Flying has become much more accessible and as such fares have gone down and price sensitivity has massively increased. It’s fair to say that fares rule supreme now in most segments of the market. This has completely changed a passengers’ sense of loyalty to their airline and by extension their alliance.

Now that’s a thought to ponder. Think about it.

We’ll very likely have to revisit this issue again.

Featured Image Credit: ASEAN.Travel

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