High ally

Latin Trade,  May, 2002  

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When airline partnership Star Alliance kicked off, it had five members. Today, the oldest of the major aviation alliances boasts 15 players, including Varig, Mexicana de Aviacion and United Airlines. It also broke ground recently for a Star Alliance concourse at Miami International Airport, a project that will see all alliance carriers fly in and out of the same area of the airport, expediting passenger and luggage connections. With May marking the fifth anniversary of the alliance, Star CEO Jaan Albrecht talks to LATIN TRADE Up Front Editor Mary Dempsey about the partnership's future amidst trying times.

You describe Star Alliance as a stable partnership. But what about members, like Varig, mired in financial trouble?

Today, particularly after Sept. 11, there are really very few airlines that are not having financial problems, that are not reprogramming, rescheduling and perhaps reinventing themselves. Several of our partners are experiencing problems [but] ... our alliance has been based on collaboration.

Should we watch for new alliance members?

We are having talks now with the Chinese carriers and we're hoping to integrate one. The Chinese government is part of this. So it's difficult to say how long this could take.

What do you look for in an alliance partner?

The reservations systems. Would it be easy to make a booking? Would it be possible to make a through check-in and seat assignment to accrue frequent flier miles?

How should business travelers evaluate an alliance?

The first question is whether the alliance is flying where I want to go. Second is your personal experience ... does the integration and transfer of my luggage work among the different airports? Thirdly, the recognition by the carrier and by the alliance of the passengers in frequent flyer and other programs.

When Star started, there was talk that it would operate as a giant global airline marketed simply as Star Alliance. What happened to that branding plan?

We had this idea of a mega-airline with 5,000-plus aircraft, but what we found ... is that passengers like to see the cultural differences between the partners. They appreciate, if they board a Thai Airways flight, seeing a Thai uniform, a Thai employee, Thai cuisine.

Has the new emphasis on airline and airport safety affected alliance operations?

Yes. We have minimum connecting times. If you were transferring in Miami from Lufthansa to Mexicana for Cancun, for example, with these new security measures the minimum connecting times could be jeopardized if you have to go out of the sterile area and go through security checks again. But, so far, we're trying to coordinate with airport authorities to make this transfer easy and smooth.

Anything else?

Yes, the baggage area. The transfer of bags must meet new FAA requirements.

You're a former insider with Mexicana de Aviacion and its holding company, Cintra. What's going on with the privatization of Mexicana and Aeromexico?

The whole thing has been put on hold. The strategy was to base this on a strategic partner but, after Sept. 11 ... there are not many partners willing to put the money up front.

If Mexicana is sold, will it leave Star Alliance?

Let's suppose it is sold to another carrier; ownership in itself is not a reason not to participate in our alliance. This would be up to the new owners to make an assessment of the benefit of Star Alliance. The further you integrate in an alliance makes it harder to leave.

What's the future of airline alliances?

Experts several years ago said that in five to 10 years there would only be five carriers worldwide. I think it's not going to be five carriers but five alliance or four alliances.

COPYRIGHT 2002 Freedom Magazines, Inc.
COPYRIGHT 2002 Gale Group