oneworld reports record revenues as it ends its first decade08 June 2009
- Fares and sales activity up 25 per cent year-on-year to US$850 million
- Interline revenues rise 10 per cent to US$2.4 billion
- Airline grouping with best collective financial record again
Airlines in oneworld® generated record revenues from the alliance's sales activities in the past year - ending the grouping's first decade on a new high.
More than eight million passengers transferred between the airlines' flights in 2008 producing interline revenues within the alliance of US$2.4 billion, up 10 per cent year-on-year in both cases.
Revenues from oneworld fares and sales activity in 2008 totaled more than US$850 million, a 25 per cent increase.
These oneworld revenues grew significantly faster than member airlines' overall passenger revenues, which collectively edged up just 3.5 per cent.
Alliance sales in oneworld's key European target markets of Belgium, France, Germany, Italy, the Netherlands and Switzerland - all home countries of airlines in or joining rival alliances - were particularly strong, with the number of accounts registered for its businessflyer corporate sales product for small and medium enterprises (SMEs) rising 12 per cent to almost 10,000. Revenues from this sector in France soared by more than 50 per cent.
Yields from oneworld sales overall also remained solid, with a record 75 per cent of revenues generated by the alliance's fares coming from tickets sold for travel in premium cabins, .
Even though the turbulence buffeting the entire industry forced its member airlines into their first collective annual losses since 2003, benefits generated through their oneworld membership enabled them to maintain their position as the grouping with the best financial track record. Based on latest full year results from members of all three alliances, oneworld members combined lost US$1.7 billion net - against total losses by Star members of US$8.8 billion and SkyTeam's collective US$13.3 billion deficit.
oneworld is the only alliance whose member airlines have collectively achieved net profits in decade since it was launched - with oneworld carriers' combined net profits since 1999 totalling US$8.3 billion, compared with cumulative losses by Star members of US$3.4 billion and by SkyTeam of US$32.6 billion.
When oneworld was launched in 1999, it offered just one alliance fare - its round-the-world oneworld Explorer. Today, that portfolio has grown to more than a dozen alliance fares - a wider range than offered by any other alliance - used by some 100,000 customers in the past year alone. oneworld is the only alliance to sell its fares on-line, with its oneworld Explorer booking website launched in December.
During the past 10 years, oneworld has generated a total of US$5 billion for its member airlines through alliance fares and sales products, with revenues rising by 330 per cent from the US$200 million reported in the alliance's first year.
By comparison, revenues generated by the alliance's member airlines from their passenger activities over the same ten-year period have risen 96 per cent, from a collective US$39 billion in 1999 to US$75 billion in their latest full financial years.
Interline revenues generated within oneworld - from passengers transferring between flights operated by one member airline to those of a partner in the alliance - have also grown faster than its member airlines' passenger revenues, up 153 per cent during the 10 years of oneworld's existence, from less than US$1 billion in 1999 to the US$2.4 billion in 2008.
Reflecting its focus on quality above quantity, oneworld continued its award-winning ways in the past year, voted the World's Leading Airline Alliance for the sixth year running in the World Travel Awards, based on votes cast by some 170,000 travel professionals, including more than 110,000 travel agents in 200 countries. oneworld is the only alliance to have won this award since it was first presented.
The alliance's latest results were revealed as the Chief Executives of its member airlines met in Kuala Lumpur for their mid-year oneworld Governing Board session - with S7 Airlines Chief Executive Vladimir Obyedkov and his team welcomed to their first oneworld gathering since the airline was elected on board last month as a member designate, to join next year.
oneworld Managing Partner John McCulloch said: "The results from the past year and from oneworld's first decade as a whole make abundantly clear the growing value the alliance has added to all its key stakeholders.
"In an industry where profit margins are thin at best - let alone at times of global economic downturn - revenues and cost savings from oneworld have made an increasingly important contribution to our member airlines' financial standings.
"For frequent, international air travellers - our core target market - alliance services and benefits have fast become a ‘must have', so oneworld's customer offering has never been more important in terms of keeping our member airlines competitive and their customers satisfied.
"As we enter our second decade, the alliance's strategy remains the same - focussing on the quality rather than quantity of our member airlines and on adding value for our customers and shareholders."
As oneworld starts its second decade, the alliance and its transatlantic airlines are working on plans to enable them to unlock even more of oneworld's potential with further benefits and services for travellers, in anticipation of gaining anti-trust immunity (ATI) in the USA, with regulators there due to rule by late October on the ATI application by American Airlines, British Airways, Finnair, Iberia and Royal Jordanian. These carriers are also seeking the necessary regulatory approval from the European Union
The alliance is preparing too to welcome on board Mexicana and affiliate MexicanaClick later in 2009.
Also this year, the alliance's biggest airport co-location project to date will be completed, with all of its on-line airlines at London Heathrow completing their moves from across all five of the airport's terminals into just two - Terminals 3 and 5. At Barcelona, all oneworld on-line airlines will also move later this year into the new Terminal Sur.
The alliance is also increasing its focus on helping its member airlines reduce costs, with a new top-level working group establish to drive this activity across all areas, under the project name RACE - Reducing Airline Costs Effectively.
Speaking as Chairman of the oneworld Governing Board, Gerard Arpey, Chairman and Chief Executive of American Airlines, said: "oneworld has made an important contribution in helping our partner airlines endure a tumultuous decade while still achieving the best collective profitability of any alliance. Our on-going focus on quality will not waver. While our combined network is unmatched, our focus has always been on quality rather than quantity, on service rather than size. This is what makes oneworld stand out as an alliance - and that will not change.
"The decade to come will bring additional challenges, so we're going to work even harder to make sure oneworld creates value for our member airlines and delivers more services and benefits to our customers - hopefully with the benefit later this year of anti-trust immunity between our transatlantic oneworld partners, enabling us to compete on more equal terms with other alliances."
oneworld brings together some of the best and biggest names in the airline business - American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malév Hungarian Airlines, Qantas and Royal Jordanian, and around 20 affiliates including American Eagle, Dragonair, LAN Argentina, LAN Ecuador and LAN Peru. Mexicana and its affiliate Click Mexicana will join the alliance in 2009 and Russia's S7 Airlines in 2010.
Between them, these airlines:
- Serve almost 750 airports in nearly 150 countries, with some 8,500 daily departures.
- Offer nearly 550 airport lounges for premium customers.
- Carry some 330 million passengers a year.
- Employ 300,000 people.
- Operate almost 2,500 aircraft.
- Generate some US$100 billion annual revenues in total.
The alliance enables its members to offer their customers more services and benefits than any airline can provide on its own. These include a broader route network, opportunities to earn and redeem frequent flyer miles and points across the combined oneworld network and more airport lounges. oneworld also offers more alliance fares than any of its competitors. It is the only alliance with any airlines based in Australia, South America or Asia's Middle East.