Wednesday, November 18, 2009

Becoming the Junior Partner: U.S. Airways and Star Alliance

Until just a few weeks ago, there were two domestic airlines in the Star Alliance: United and U.S. Airways. They were grudging partners, always doing as little to cooperate as possible.

On October 27, that changed. Continental Airlines joined Star Alliance after leaving SkyTeam three days earlier, the first airline to change alliances since alliances debuted. Continental left SkyTeam because, as incoming CEO and current President/COO Jeff Smisek put it, the merger of Delta and Northwest had left Continental "relegated to junior partner status."

Even before the official transition, United and Continental -- which had previously discussed a merger but decided against it -- had started aligning their interests. They put their fee structures and complimentary upgrade policies in sync; for instance, Continental began including Hawaii in its list of destinations for complimentary domestic upgrades. Continental Presidents Club members also got access to United Red Carpet Clubs a few weeks early.

Yesterday, they raised the stakes: beginning in mid-2010, United and Continental will offer reciprocal domestic upgrades to elite passengers, including giving Continental elite members free access to United's Economy Plus seating.

United specifically denies such access to U.S. Airways elite members and has said nothing about extending it to them.

The writing is on the wall, Mr. Parker: U.S. Airways is the junior domestic partner in the Star Alliance. Maybe American Airlines can make room for you in oneworld.

No comments: