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A new round of aviation consolidation could be triggered if global airline alliances start to fall apart.
The prediction comes in a new report on the state of the air transport market by aviation analysts OAG.
John Grant, executive vice-president at OAG, told the Daily Telegraph: “There are currently more airlines than can realistically exist and alliances are no longer the only means of international competition.
“Increasingly joint ventures, equity stakes and less formal partnerships are being used, all of which challenge the existing structures and operations.”
Qatar Airways building up a 10% stake worth about £1.2 billion in British Airways parent International Airlines Group is seen as an example.
Although both carriers are members of the Oneworld alliance, Grant said this is a sign of how traditional relationships between airlines are changing.
“Qatar has been watching BA’s progress very carefully and seen how it has been successful operationally and financially.
"It sees BA as best in class and wants to be associated with it from a business and investment point of view,” he said.
Perhaps more significant is Korean Air, a member of the SkyTeam alliance, which has announced a code-sharing deal with American Airlines, a key member of the Oneworld.
“This highlights how airlines will make decisions outside their alliances which are in their best interests as being flexible outweighs their membership,” said Grant.
He believes alliances will survive in the medium term, though there is “a lot of activity around the edge”.
“The alliances that exist are strong but fractures are possible,” said Grant. “Twenty years ago alliances were a way around regulatory control but that control is easing.
“It would take a brave step for an airline to walk away from an alliance and would take years to unwind the operational arrangements but someone could decide to do it at some point.”
The dominance of US carriers American Airlines, Delta and United as the ‘big three’ of air travel could be challenged by the rise of new airlines and population growth in emerging markets.
OAG’s report - titled The Fight for Global Markets - suggests that China, Indonesia and Turkey could be the home countries of the world’s three major airlines by 2025 due to their large domestic markets, expanding economies and advantageous geographic positions.
Grant added: “While the target of the US concern has been Gulf carriers, it could equally have been Chinese carriers. Chinese carriers are closing in and within seven years China will have replaced the US as the world’s largest aviation market.”
Fast-growing Gulf airlines such as Emirates, Etihad and Qatar are likely to continue to grow, but not as fast as airlines based in the three countries identified by OAG.
“This is because of the nature of their traffic,” Grant said. “The Gulf carriers are much more long-haul connecting carriers and though they will continue to compete in long-haul traffic, almost by sheer size of their local markets airlines and the growing middle classes wanting to fly more in, operators in Turkey, Indonesia and China are likely to grow faster.”
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