Airline partnerships will become more common, though the industry is waiting for the first intercontinental move Andrew Lobbenberg, European airline research analyst at RBS told the Airline Partnerships & Alliances Summit.
Lobbenberg said that clearly each of the airline alliances is increasing its membership, and in the presence environment that “...alliances and consolidation will become even more acutely relevant.”
Lobbenberg said the reasons were many for this. Top of the list was that “Where carriers are pulling back on capacity, alliances allow backfilling of secondary route cancellations.”
Commenting on the fact that there are now three main competitors on the transatlantic
“These partnerships will move to further execution with 2011 being the first time we have the full suite – each of the main alliances operating with an anti-trust immunised joint venture. Most commentators are using this as a building block to be optimistic for the north Atlantic market.”
In general, Lobbenberg said that the background was one of “Optimism for the network majors, caution for the low cost carriers and extreme caution for the network minors.”
In Europe, Lobbenberg said that although there are lots of airlines for sale, “...it is not the right environment for potential acquirers to be brave.” In the meantime, more airlines would go bankrupt.
Finally, although the industry has seen consolidation with the regions, the industry is still waiting for the first intercontinental move. And when that happens
“...flags could be removed from the tailfins, politicians would be removed and the industry could become like any other business like manufacturing widgets.”
Nevertheless Lobbenberg said the first move is unlikely to come in the US market because of political considerations.
He said that a move such as that of IAG for Qantas, though possible, might be delayed firstly by protectionism in Australia, and also because Qantas may seek to strengthen its negotiating position with potential alliance partners by increasing services into Asia.