Even at 20 years old the oneworld global alliance can still grow and evolve. The group launched a new “oneworld connect” program this week at the IATA Annual General Meeting in Sydney, with Fiji Airways as the first member. Membership services and benefits will be offered at an as-yet-undisclosed date in the future.
The new Connect program allows airlines to join the global group in a limited manner, making the investment a viable expense for smaller airlines. Oneworld CEO Rob Gurney suggests that “the pool [oneworld] is fishing in now for potential carriers is quite limited” both in terms of the number of unaffiliated airlines and their size. Small airlines can benefit from alliance membership but the investment to get there with full reciprocity across the group no longer is a viable expense to bear.
Oneworld connect changes that equation. The requirements across the full alliance are very limited. Connect members must offer priority check-in and boarding to elite members across the alliance. Connect members must also participate in the Global Explorer around-the-world fare products. Beyond that, benefits such as interline baggage handling or frequent flyer program participation must be offered between the connect carrier and its sponsors but not the rest of the alliance. Moreover, the loyalty program integration is only required if the connect member has a program. The new structure supports members without a program. That is a significant deviation from prior requirements.
Outsized value for oneworld connect airlines
The initial financial investment for connect members is smaller but the airlines should expect outsized return on that spend. At least Fiji Airways does. The carrier already operates a codeshare arrangement and frequent flyer reciprocity with its four sponsor airlines but CEO Andre Viljoen believes his airline will benefit significantly from the new position. “It puts us on the global airlines map. From a small standalone airline we’re now on the map. It is a big difference. There are countries where we believe we’re not [developing] traffic and we believe this will open those up.”
A minimum of three sponsor airlines is required for a new connect member to join. This ensures a critical participation level within the broader alliance. It should help drive growth in participation and potentially transition from connect to full member as the value of alliance participation is realized. For Fiji Airways the sponsor airlines are the four original founding members of oneworld: American Airlines, British Airways, Cathay Pacific, and Qantas. One of the sponsor carriers must also serve as the mentor for the incoming carrier, guiding it through the implementation process.
In the case of Fiji Airways’ ascension into the alliance Qantas will serve as the mentor airline. Qantas CEO Alan Joyce believes that this role is about more than just passenger flow or IT systems integration. Fiji Airways is in the midst of a fleet review program today. Qantas will now assist with that effort. The two will also cooperate on pilot training and other infrastructure endeavors. Again, the goal is to deliver an outsized return to the smaller airlines. This value proposition comes with minimal risk to the alliance and strong value in locking up participation in the larger alliance.
Bringing LCCs into the alliance
Given its existing relationship with the sponsor carriers Fiji Airways’ role as the introductory partner is a logical move for all parties. The process can be tested against an implementation that should be relatively easy given the existing relationships. Oneworld executives are clear, however, that the program is designed to scale and that other potential members are under consideration around the globe. The willingness to accept carriers without a loyalty program opens up a significant new population of potential partners. This includes the long-haul LCC community of airlines.
On that front IAG is an obvious potential player. With its LEVEL brand and also recent ownership stake in Norwegian the group stands to benefit nicely from integration of the longhaul LCC carriers into the alliance. CEO Willie Walsh is keen on that opportunity, though he stopped short of indicated explicit plans:
Obviously [oneworld Connect] will have a role to play as the longhaul low cost model evolves. And that’s the important thing we’re talking about with oneworld today. It is evolving. It is evolving to reflect the fast-changing nature of the industry. If the industry is changing in that direction then oneworld will certainly look to see if there are opportunities to the benefit of our airlines and the benefit of our customers
One risk with the new program is that some passengers will receive a lesser level of service than they expect when seeing the oneworld logo. Yes, the connect logo is slightly different, but is that enough for passengers to understand that the benefits aren’t really the same? Priority check-in and boarding are great, but full member carriers also offer an increased checked bag allowance and lounge access. The connect members are not obligated to provide such. Checking bags through on some itineraries and not others could also create problems; it already is an issue for separate reservations among full alliance participants today.
Building a stronger network and adding benefits for travelers is important. But so is delivering on the consistent passenger experience. This move is a strong step forward but still a step short of perfect.
More from IATA AGM 2018
- Fiji Airways signs on as inaugural oneworld connect member
- Star Alliance teases increased award availability, new top tier for travelers
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- SkyTeam grows a Digital Spine
- Taxes v Tourism: A battle for the Bahamas airports