The increasing dominance of airline alliances and consolidation among airlines should be viewed with concern by corporate customers, according to Paul Wait, Virgin Atlantic’s general manager sales.
Speaking at the Guild of Travel Management Companies’ Autumn conference, he cited the combined alliances’ share of capacity on North Atlantic routes as 83.2%.
Virgin has so far refused to join any of the three major alliances, although its major shareholder Singapore Airlines is a member of Star Alliance.
“The growth of airline alliances and the recent spate of airline consolidation poses some challenges,” said Wait.
“Key airport hubs are increasingly dominated by individual alliances, and by a large home carrier. This reduces choice for the consumers and corporate customers.”
Non-alliance carriers find it “difficult” to compete with these dominant airlines at large hub airports, said Wait.
“There is a risk that some alliances or merged airlines will try to use their position at these hubs to impose conditions on the corporate customers, restricting the choice of carrier,” he continued.
“There is also a risk that using a particular alliance carrier from certain airports will become unavoidable, thus increasing the price of fares.”
According to Wait, this topic is “at the top of the agenda” for corporate customers and travel management companies in the US in particular.
“They have seen four major carries reduce to just two adn they are facing the possibility of having their travel programmes dictated to.”