4th June 2006

Oneworld In Massive Expansion

After some slow years, Oneworld Alliance will see a number of changes during the next months. Aer Lingus decided to leave the group in order to focus more to the low-cost market. At the same time, three new airlines are lined up to join the alliance.

Aer Lingus' strategy has changed fundamentally since it joined the alliance six years ago and is no longer convergent with Oneworld's. The alliance's key target market is the multi-sector, premium, frequent international traveller, while Aer Lingus has repositioned itself as a low fares point-to-point carrier. The timing and terms for its withdrawal will be considered at the next meeting of the alliance's Governing Board, but it is likely to be in early 2007.

The departure of Aer Lingus - currently the smallest airline in Oneworld, with 13,765 million of the total 761,794 million available seat kilometres capacity offered in 2005 by its existing members. Aer Lingus has confirmed that it has no intention of joining another global alliance and that its key bilateral relationships will remain with Oneworld members.

New Members

While the alliance looses one partner, three new ones are confirmed to join the group. Beside Royal Jordanian, Malév and Japan Airlines (JAL) are set to join. Japan Airlines will become part of Oneworld in early 2007, after accepting a formal letter of invitation to join the world's leading quality global airline alliance.

JAL is the biggest carrier in the Asia-Pacific region in terms of both revenue and passengers carried, and the largest carrier yet to link to any of the global alliance. Using virtually all measures, it will be in the alliance's biggest three, alongside American Airlines and British Airways.

Besides the mainline Japan Airlines, five other members of the JAL Group will also join Oneworld as affiliates -JALways, Japan Asia Airways, JAL Express, J-Air and Japan Transocean Air.

JAL and its affiliates will add 47 destinations to the Oneworld map. With Malév and Royal Jordanian bringing another 25 airports on-line to the alliance, the new recruits will expand its network to almost 700 destinations in approaching 150 countries.

They will increase Oneworld's passenger capacity by a 20%, taking its share of the total global air transport industry to almost 20 per cent. The expanded alliance will offer more than 9,200 daily departures (almost 15 per cent more than today), with their combined fleet of some 2,500 aircraft carrying 320 million passengers a year. The new recruits will extend the grouping's combined annual revenues by a third, to US$86 billion.

A Japan Air Lines Boeing 747-400 climbing out of Sydney (Photo: Michael Meier)

Ongoing Integration

Work has already begun to connect JAL's key IT systems - and those of Malév and Royal Jordanian - to their new partners' platforms and to bring their various internal processes and procedures into line with the alliance's requirements.

JAL has already interline e-ticketing (IET) links in place with American and British Airways, enabling passengers to transfer between their flights using just electronic tickets, without the need for a traditional paper ticket. It expects to connect with Cathay Pacific within the next few months and with the rest of the alliance's current members and recruits by early next year, before it joins.

Malév has IET in place already with four existing Oneworld carriers - British Airways since January this year, American since February, and Cathay Pacific and LAN since April. It expects to link up with Aer Lingus, Iberia and Qantas this month, and with Finnair next month, with the cutovers with its fellow new recruits to be completed before they all join early in 2007.

Royal Jordanian has delayed implementing its IET links until moving its IT systems to a new platform. With this now underway, it expects to begin its IET links next month, starting with its Oneworld sponsor British Airways, with the rest of its connections cutting over during the subsequent months, before it too boards.

Oneworld is currently the only alliance with interline e-ticketing (IET) between all of its partners, enabling passengers to travel throughout its network using only electronic tickets.

JAL and Malév have also already joined the alliance's Global Explorer round-the-world fare product, which already included some other carriers which are not part of the alliance.

Since being invited to join Oneworld, Royal Jordanian has signed contracts for five new IT systems to enable it so deliver the alliance's services and benefits, and moved its operations at Paris from Orly to CDG, to operate alongside its partners.

In the months ahead, the three recruits will launch massive employee training and communications programmes, to ensure that their staff worldwide are ready to provide Oneworld's customer services and benefits from day one

Once all their pre-joining requirements have been audited by their sponsors on behalf of the alliance, exact dates will be confirmed for them each to join.

A Royal Jordanian Airbus A310 at Frankfurt Airport (Photo: Michael Meier)

First new members in five years

The three members elect will be Oneworld's first new recruits for more than five years. In the interim, the alliance's focus was on helping its member airlines weather the worst financial crisis the industry has faced.

Its success in this is reflected in the fact that Oneworld is yet again the only alliance whose members collectively achieved a profit in their latest full financial years - of US$1.8 billion net, while SkyTeam members lost nearly US$5 billion and Star's plunged more than US$20 billion into the red.

Speaking on behalf of his Oneworld counterparts, American Airlines Chairman and Chief Executive Gerard Arpey said: "Adding Japan Airlines, together with Malév and Royal Jordanian, is one of the most significant developments since Oneworld's launch seven years ago. We are thrilled to be welcoming them on board. Oneworld and all its member airlines have committed to do whatever is necessary to complete their boarding process as smoothly and speedily as possible, so that they can offer the full range of Oneworld services and benefits from the day they join."

Japan Airlines Chief Executive Designate Haruka Nishimatsu said: "Japan Airlines and Oneworld have been able to conclude all necessary membership agreements extremely speedily, which signals excellent working relationships going forward. We are determined to maintain this pace and build on this level of co-operation to enable JAL to join Oneworld as soon as possible, to the benefit of our customers, shareholders and employees. We know we will be in very good company. Oneworld is without doubt the leading quality alliance."

Photos: Michael Meier