The value of alliances: is there any truth to growing opinions that alliances are becoming outdated?

The proposed new tie-up between LATAM Airlines Group and Delta Air Lines shows a certain level of forward thinking by both major players. However, it also raises questions about the long term viability of the global alliance structure as LATAM exits oneworld and Delta’s partnership roster becomes more balanced between non-alliance members and SkyTeam airlines.

Delta is an anchor member of SkyTeam, and the airline’s JV with its fellow alliance members Air France-KLM has been a success. But its tie-ups with GOL (which vanish, given its new partnership with LATAM), Virgin Atlantic and WestJet show that alliances do not offer the network breadth and depth that airlines operating in today’s global aviation industry need. Delta, in particular, needed a strong partner in Latin America.

This is not the first time the validity of alliances has been questioned. Qatar Airways Group CEO Akbar Al Baker, spoke at the CAPA Qatar Aviation, Aeropolitical and Regulatory Summit, where he stated the alliance system “is old fashioned”, adding alliances are only “fashionable” and allow airlines to “burn miles on each other and use their lounges”. Qatar Airways is the second largest ASK contributor to the oneworld alliance.

As one of the discussion topics at the forthcoming 2020 Americas Aviation & LCCs Summit, CAPA – Centre for Aviation will explore this subject and especially look at the future of global alliances and if a balance between non-alliance members and alliance members is the only option for the future.

NOTICE: Informa, Aviation Week Network and CAPA – Centre for Aviation are constantly monitoring the COVID-19 situation as the safety of customers and staff is always its top priority. At this stage, the CAPA Americas Aviation & LCCs Summit will continue to take place as planned on 7-8 May in San Juan, Puerto Rico. We are following official guidance and working with our venue partner to put the best preventative measures in place.

CAPA’s Global Airline Outlook for the 2020s predicted that at some stage during the first half of the decade there will also be an economic downturn, possibly very substantial. On historical trends it is already well overdue and there is little to predict just how great the scope will be. The coronavirus outbreak has meant that this is now an inevitably for many countries.

As the foremost authority on aviation in the world, CAPA‘s events provide cutting edge knowledge about strategic market trends and dynamics to help attendees make informed decisions, delivering the information and connections needed to inspire and improve business. The 2020 Americas Aviation & LCCs Summit is this year taking place at the Hyatt Regency Grand Reserve Puerto Rico between 7-8 May 2020.

North American Airlines face a mixed outlook for 2020 as uncertainty over the grounding of Boeing 737 MAX narrowbodies lingers and the prospects of weakening economic trends continue to grow. There’s growing concern that an imbalance between supply and demand will occur once the MAX returns to service, particularly so in the US, which would create pricing pressure.

The summit will examine key commercial and operational issues affecting airlines and airports across the Americas focusing on both domestic issues and growth prospects in key international markets. CAPA will challenge leaders of the aviation industry to reflect on what is needed to drive the industry forward, using examples of innovation in outside markets as a benchmark to follow.

This high level forum will also examine the geopolitical outlook and its potential changes following the 2020 election, airline infrastructure reform, as well as the continued development of route economics as new aircraft technology opens up ultra long haul markets. The disruptive role of new distribution options and an increasingly demanding customer profile will inevitably be a key feature as 2020 heralds the next generation of developments in this area.

New to the 2020 Americas Aviation & LCCs Summit will be an injection of stimulating discussion on the evolving LCC market. North American LCCs are the most mature in the world, but recently they’ve faced headwinds to keep costs competitive while increasing revenue, as ULCCs become a significant force.

The dedicated LCC Summit sessions will assess the current state of the competitive LCC landscape, how to improve profitability and unlock sustainable growth prospects in key markets. As domestic pressures increase, strategies now stimulate trans Pacific, trans Atlantic, Latin American and Canadian network thinking.

FIND OUT MORE… visit the 2020 Americas Aviation & LCCs Summit homepage to find out more about this not-to-be-missed opportunity to discuss relevant issues impacting the aviation sector and learn meaningful insights from your industry peers.