JV JARGON BUSTER
ALLIANCES – there are three airline alliances, Oneworld, Star Alliance and Skyteam. Although these allow for partnerships between member airlines, they don’t have the same regulatory approval as joint ventures so relationships don’t go as deep.
ANTITRUST IMMUNITY – status granted by authorities such as the US Federal Aviation Authority that ensures joint ventures don’t create a monopoly and remain in the customer’s interests.
CODESHARES – a weaker agreement whereby two or more airlines market and sell the same flight. For example, you could fly on a BA plane booked on aa.com, earning the same points and paying the same price as on ba.com. The code for this flight shows up as both BA6138 and AA6138. Joint ventures often include codeshares.
INTERLINE AGREEMENTS – JVs allow passengers to buy connecting flights with partner airlines in the same booking. Both or all airlines have shared duty-of-care responsibilities towards the traveller so if the first flight from Frankfurt to Chicago with Lufthansa is severely delayed, for example, then United guarantees to get you on your onward connection to Detroit for free. Airlines call this “seamless connectivity”.
METAL NEUTRALITY – within a joint venture, it doesn’t matter which airline’s aircraft (or “metal”) you physically fly on. Prices, schedules, frequent flyer miles, routes and connections are all aligned, and the airlines share the revenue.
OPEN SKIES – government agreement made in 2008 to allow EU airlines to fly without restriction to any city in the US, and vice-versa.
RECIPROCAL BENEFITS – passengers are granted the same frequent flyer miles and lounge access rights regardless of the airline they actually fly on.
WING-TO-WING FLIGHTS – when flights with two different airlines depart at the same time. Within a codeshare, airlines can’t work together to avoid this, but within a joint venture they can. They can optimise their schedules so flights depart at different times throughout the day to give passengers more choice.
low-cost carriers, which have been eating into the profits of traditional airlines for some years. More recently, the emergence of low-cost long-haul operations across the Atlantic has created even more of a shake-up, with the likes of Norwegian, Westjet and Iceland’s Wow Air siphoning off customers who might otherwise have flown with BA or Virgin Atlantic, for instance, to the US.
The battle is set to continue as budget airlines seek out their own partners. Ryanair announced a tie-up with Air Europa earlier this year, allowing customers to connect to 20 destinations from the Spanish airline’s long-haul network of destinations (including Boston, Miami and New York) via Madrid, and make Air Europa bookings on ryanair.com.
Ryanair chief executive Michael O’Leary said: “This partnership is the latest enhancement as we continue our journey to becoming the ‘Amazon of travel’. We continue to speak to a number of other long-haul airlines about potential connecting flight partnerships and we look forward to offering our 130 million customers an even greater choice and range of longhaul services in 2018.”
Meanwhile, Norwegian has announced a new relationship with Easyjet to get feeder flights from across Europe on to its lowcost services to US cities such as Las Vegas, LA and Oakland-San Francisco (see Upfront, page 8). In the East, low-cost airline Air Asia has now signed a memorandum of understanding with Air China to launch a new budget carrier called Air Asia China. Air Asia chief executive Tony Fernandes was reported as saying: “This Chinese venture represents the final piece of the Air Asia puzzle” as it “closes the loop” in the region.
Whether it is the last marriage of convenience remains to be seen, but for airlines, while there may be an occasional mention of love, signing that bit of paper is all about business.
The emergence of low-cost long-haul operations across the Atlantic has created even more of a shake-up