Marriage Of Convenience

Polygamy has become the secret to success among legacy carriers. Jenny Southan reports on why airlines are joining forces and what it means for travellers

Exchanging vows with your arch rival is not common among people, but for airlines, strategic knot-tying ceremonies have become more and more popular. Stronger than a code share but weaker than a merger, the first joint venture (JV) was between Northwest Airlines and KLM in 1997, and since then the wedding bells have rung nonstop, although there’s been a fair amount of infidelity on the way.

According to research from global management consulting firm LEK, JVs made up only 5 percent of global long-haul airline traffic a decade ago, yet by the end of 2016 it was 25 percent. In its report Reaching New Heights Together in 2017: How Airlines Can Maximise the Value of Joint Ventures it states: “We believe that deeper integration between JV partners of all sizes is inevitable, and that ‘virtual mergers’ will become increasingly popular. By 2021, 35 percent of all global long haul traffic could be part of an immunised joint venture.” Some experts believe it could reach 50 percent. Whatever happens, consolidation will continue.

What are the benefits? For airlines, many. Marcel Fuchs is vice-president of Atlantic and Pacific sales for United, which has joint ventures with ANA, Air New Zealand and Lufthansa. “Through these government approved partnerships, we jointly co-ordinate our schedules, sales, marketing and customer service to offer many more travel options than we would otherwise be able to by ourselves. By co-operating closely and sharing the economic benefits in these relationships, we provide much better access for all customers.”