Since Qantas secured a share in financially troubled Air New Zealand, there have been continuous rumours regarding the stability of Qantas’ relationship within Oneworld and their attraction towards the Star Alliance, which they have neither denied nor confirmed.
When one takes a look at the two alliances you cannot blame Qantas for feeling tempted towards Star. They must surely envy the way in which Star Alliance has developed, whilst Oneworld has tended to stagnate, lacking the image and prominence of Star Alliance. With Qantas’ stake in Air New Zealand, a member of Star, could it be likely Qantas are pursuing the possibility of leaving OneWorld for Star?
Yet even if Qantas had an interest in switching alliance allegiance, there is a major stumbling block – namely that British Airways owns a 17 per cent stake in Qantas. This would definitely receive a short thrift from their shareholder and alliance partner, British Airways.
So do you think Qantas would be interested in leaving OneWorld for Star?
In my opinion it is unlikely Qantas would ever consider leaving Oneworld because of many factors not only because of their tie up with BA, but because of the strong links between the UK and Australia in terms of culture, business etc. Moreover, their very strong presence at LHR as their major intercontinental market. However, in this day and age it would be naïve to assume anything along these lines.
Your opinions?
By: KabirT - 1st March 2003 at 07:07
SQ wont leave Star…they are having a merry time with them.
By: mongu - 28th February 2003 at 22:26
Well even if the US government would allow a foreign entity to purchase a stake in AA, it would be a risky move! Some might say that all you’re buying is a lot of debt and liabilities.
Far better to actually start a new carrier in the US, or maybe purchase a stake in a smaller carrier and inject cash and management teams into it to grow it into a major ally. I think America West looks good for such a plan.
Anyway – back to Alliances. Persuading SQ to join Oneworld would be a helluva coup, but I don’t think it is likely. What would SQ gain by this?
By: MapleLeaf_330 - 28th February 2003 at 19:37
This is a tricky situation, and I believe, may ulitmately depend on what happens to AA, not BA. BA will be fine, the UK government will not see it die, and, as previously pointed out, the airline seems to be recovering. However, should AA continue to stumble, it will be ripe for investment, if allowed by the US Government. QF and BA may not only be trying to secure their presence in Oceana, but also across the Atlantic, and investment in AA would ensure oneworld’s Atlantic operation doesn’t bend to the Star Alliance.
Beyond that I believe that NZ would join QF. Qantas would be stupid to risk threatening its presence to the US west coast. It already has to deal with United, and to some degree, Air Canada, across the Pacific, and now Air New Zealand. My friend is flying NZ to the South Pacific this time next year.
Also, doesn’t SQ own a portion of NZ? If BA, AA and QF could lure them into the Oneworld that would be pretty unbeatable throughout Asia and Oceana.
By: Saab 2000 - 24th February 2003 at 19:08
RE: Would Qantas Consider Leaving OneWorld?
Oh indeed, I would also be sceptical about Qantas taking a 25% stake in American. However, in any such case of take-over, Qantas would be in an undoubtedly good position to do so with an interim profit of $352.5 million. If for example, war broke out in Iraq and the aviation industry was in turmoil with US airlines insolvent and trouble in Europe, then Qantas would be poised to take advantage of the situation.
If it evaluated its position and its potential opportunities out there then Qantas would have a status by which it may be able to invest in foreign airlines and take a 25% stake in American under current US legislation.
By: mongu - 24th February 2003 at 18:11
RE: Would Qantas Consider Leaving OneWorld?
I agree that AirNZ will join Oneworld with QF staying in.
However I am sceptical about QF taking a share in AA. In the past, the US government has screamed bloody murder and got the B2’s on standby, whenever any foreign company has so much as hinted at such an idea. In other words, I think the US regime is too protectionist for this to be likely.
By: MSR777 - 24th February 2003 at 16:51
RE: Would Qantas Consider Leaving OneWorld?
I think you make a compelling case for Qantas staying put, and you will most likely be correct. Alliances are a fact of modern airline life and look set to stay that way. (Like LoCo carriers-but lets not go there!) The alliance topic will be an interesting one over the coming year or so.
The future’s bright – the future’s Airbus!
IF62M
By: Saab 2000 - 24th February 2003 at 10:56
RE: Would Qantas Consider Leaving OneWorld?
I totally agree with the arguments that in today’s world, anything is possible in regard to airline alliances. With UA in Chapter 11 and AA near to it, it is obvious that other partners would be rethinking where their best interest may be served.
However, I think the British Airways/Qantas link up is a paramount factor to their existence in Oneworld together. Even though there were rumours of BA selling its 17% stake in QF, possibly to SIA, the denial by Rod Eddington and the fact I cannot see BA selling something off that is making money for them, is for me a major factor why QF would not choose to leave Oneworld. Moreover, there are rumours today that QF may take a stake in AA.
Also a critical joint services agreement between QF and BA is due for renewal in June. If regulatory authorities refuse to sanction it one of the primary reasons for Qantas’s membership in Oneworld would be removed. This is the likely moment QF could jump alliances, but rumours at the moment suggest QF will re-sign the JSA.
I think the likelihood is that instead of QF leaving Oneworld it would be NZ leaving Star, thus this withdrawal would leave Star with a rather weak position in the Oceanic regions and Oneworld with the dominance.
I think a simple co-existence between QF ands NZ is highly unlikely, after all can you really see Qantas wanting to feed its traffic on to competitors? NZ’s membership of OneWorld also seems rather inevitable and a logical step since QF is settled in Oneworld so their would be heavy pressure from AA and BA, QF’s closest partners, to push NZ towards a new alliance. There would probably be more sense in QF and NZ together; the alliance would also benefit much more. Air New Zealand might get more exposure in Oneworld due to the fact that there are fewer carriers than there are in Star, plus a very strong position across the Pacific and Oceanic regions.
By: MSR777 - 23rd February 2003 at 23:11
RE: Would Qantas Consider Leaving OneWorld?
[updated:LAST EDITED ON 23-02-03 AT 11:11 PM (GMT)]Its not so long ago that British Airways was bordering on being an economic basket case, however as we know all know Mr Eddington has turned the situation around, and all credit to him for that, although that is still work in progress, it proves what can be done and this applies just as well to the situation at one or two of the Star Alliance members. I stand by my previous observation. In in this fickle industry, you cannot write off a major change of direction on the part of Qantas should the long term view of the “bean counters” within the carrier deem it the best way foreward.
Alliances are not set in stone!
The future’s bright – the future’s Airbus!
IF62M
By: mongu - 23rd February 2003 at 21:43
RE: Would Qantas Consider Leaving OneWorld?
I fail to see the rationale behind QF leaving Oneworld for Star.
1. A lot of the Star members are either heading for bankruptcy or there exists severe doubts as to their financial stability:
United,
Varig,
Air Canada
2. Some of the members are frankly lightweight, by comparison to Oneworld. They both have some little members, but Star seems to be worse off in that regard.
3. What can Star do for QF that Oneworld cannot do?
4. Each alliance has high exit costs, in terms of reservation and linkage systems and so on. As one of the fabled “bean counters” I would say that these costs should not be underestimated. Extra management time is also going to be consumed by any mucking around with Star.
By: MSR777 - 23rd February 2003 at 20:38
RE: Would Qantas Consider Leaving OneWorld?
Whatever the outcome I think that like most other things in modern aviation it will be decided by the “bean counters” I very much doubt that cultural ties will have a lot to do with it. I personally would like to see Qantas in Star Alliance, I would’t be too surprised in the future that unless One World progresses towards expansion that it too might seek inclusion within Star-stranger things have happened!
The future’s bright – the future’s Airbus!
IF62M
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February 23, 2003 at 5:03 pm