oneworld becomes nine as it turns five, building more value for customers and shareholders13 November 2003
oneworld™, the world's leading international airline alliance, celebrates its fifth birthday in Sydney today by holding a summit meeting for the Chief Executives of its partner airlines with member elect Swiss International Air Lines participating for the first time.
Besides reviewing plans for bringing the new recruit on board the alliance in the early part of 2004, they will also reflect on oneworld's progress in its first five years and appraise future strategy.
The Chief Executive Officer of Qantas, Geoff Dixon, is acting as host for his counterparts from Aer Lingus, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia and LanChile. Representatives from SWISS are joining them for the airline's first oneworld summit since it accepted an invitation to join the alliance in late September.
Geoff Dixon said: "The oneworld CEOs held their very first meeting after launching the alliance here in Sydney five years ago. We have traveled a long way together since then. The airline industry has changed fundamentally and flown through more turbulence in the past few years than at any time in the rest of its 100-year history.
"The challenges Qantas and our partners have encountered, particularly in these most recent and difficult years, would have been steeper still if we had not had the revenue and cost saving benefits that come from being part of oneworld, and the opportunities it presents to confront problems together with other like-minded, leading airlines from throughout the world."
oneworld was unveiled in September 1998 and started offering services and benefits in February 1999. The four founding partners - American Airlines, British Airways, Cathay Pacific Airways and Qantas – have since been joined by four more. Finnair was the first recruit, with Spain's Iberia, in September 1999, followed by Ireland's Aer Lingus and LanChile in June 2000, with SWISS joining them as a fully-fledged member next year.
oneworld Managing Partner John McCulloch said: "oneworld has a clear aim – to generate more value for customers and shareholders than any airline can achieve on its own. As a manageable grouping of high quality, highly focused carriers, we have made considerable progress to that end in our first five years. We know, however, there is still more we can do in the future."
Looking ahead, he added: "Competition in this industry is shifting gears. Increasingly we are seeing competition between alliances as well as between individual airlines.
"The market likes alliances. Despite the recent growth in the no-frills sector, passengers appreciate being able to reach more places, more easily, on one through-ticket, to earn and burn frequent flyer miles while doing so and, if eligible, have a network of lounges to use. Corporate customers and travel buyers are attracted to the advantages alliance fares offer. Airline chief executives welcome the cost savings, enhanced revenues, and opportunities to explore further consolidation that successful alliances like oneworld present.
"Consolidation of the world airline industry is inevitable. The question has long been when and how, not if – and it is more likely to take place on the framework of existing alliances than not. However, it won't come about overnight, and in the meantime even the biggest airlines will be able to create more value for their shareholders and more services and benefits for their customers by working together as part of an alliance."
Besides doubling its membership, in its first five years oneworld has:
- Helped its member airlines generate value totaling billions of US dollars – US$2 billion in the past three years alone – from their various relationships under the oneworld umbrella, through enhanced revenues and cost savings from initiatives like joint purchasing and sharing facilities on the ground.
- Built on its lead as the most international airline alliance, serving more territories – 136 currently – than any of its competitors.
- Introduced more alliance fare and sales products than all of the competition combined – an unrivalled choice of 12 types of tickets, offering an unmatched selection of value and flexibility for captains of industry or backpackers, whether they want to fly all around the world or just visit one continent. These products earn hundreds of millions of US dollars a year for the alliance's partners.
- Deepened bilateral links between its member airlines, and spread their benefits more widely across the alliance, from an initial two pairs of partners code-sharing (Qantas with both American Airlines and British Airways) to 20 of the potential 28 pairings today, most recently Qantas with Cathay Pacific, making it easier for passengers to transfer between oneworld airline networks.
- Established a reputation for leadership in delivering excellence in customer service and innovation, with oneworld still the only global alliance to commit to introduce e-ticket interlining fully between its member airlines. Qantas and American Airlines have just become the latest oneworld partners to implement the process, with AA to follow suit with Cathay Pacific in the next few weeks. The alliance is on track to extend it across all members by the end of next year.
- Expanded its share of the total output of the world air transport industry to some 18 per cent.
- Combined facilities at around 25 key airports around the world, with the latest shared unit, a joint transfer desk, opening last month at London Heathrow's Terminal 3.
- Generated revenues of around US$250 billion. Said John McCulloch: "With a turnover of that scale, if we as oneworld can improve the efficiency of our member airlines by just point one of one per cent - that's US$50 million a year added to their collective bottomline."
For Australians, oneworld brings the world closer to home. By itself, Qantas serves 74 destinations in 15 countries. Through oneworld, the network it can offer – with one ticket, and one check-in – is expanded to more than 570 destinations in 136 territories, more than any other alliance serves.
Qantas Frequent Flyers can earn mileage awards and points and redeem them across the combined oneworld global network. Top-tier card holders can also gain access to airport lounges offered by all oneworld carriers – more than 400 of them globally – and receive from all oneworld airlines the same sort of privileges they enjoy from Qantas.
Since it helped establish oneworld, Qantas has forged close one-on-one relationships with nearly all the other oneworld partners. Besides its joint services agreement with British Airways on the "kangaroo route" to Europe, it has an extensive accord with American Airlines, and code-shares with Cathay Pacific, Finnair, LanChile and member elect SWISS.