A mixed week for consumers as airlines edge closer together
Thursday 29 July 2010
The airline world has had a busy week, with the Oneworld alliance gaining a new member in Air Berlin and two major members of the Star Alliance - United and Continental - given the green light to merge by EU authorities
Air Berlin, Europe's fifth largest airline, is expected to become part of the Oneworld alliance from 2012, meaning that 75 additional gateways will be added to the Oneworld network - good news for customers of other members such as British Airways, Cathay Pacific, Qantas and American Airlines.
Members of airline loyalty programs belonging to any Oneworld member will be able to use their points, and vice versa for members of Air Berlin's Topbonus frequent flyer program.
As German flag-carrier Lufthansa is part of the competing Star Alliance, the entry of Air Berlin into Oneworld will mean that Oneworld members will be looking to expand their routes inside Germany, Europe's largest economy.
However, Oneworld's news was overshadowed by the announcement that United and Continental had been given the go-ahead by European authorities to merge, meaning that the only barrier to their integration is now the US authorities.
The airlines say that the merger will offer an enhanced global service from America, along with more funds to invest in the latest aircraft and new travel innovations.
As low-cost carriers serve 92 percent of the joint airlines' top 50 city-to-city routes, United and Continental say that prices will remain competitive, although several airline commentators have disagreed.
George Hobica, the founder of air fare comparison site Airfarewatchdog.com, said on his blog that "At least in the short term, fares are likely to rise, especially on routes with less competition and the 13 routes flown nonstop between the two airlines' hubs."
Adam M. Pilarski from airline consultant AVITAS told US News that:
"In the long run, I think it's fairly obvious that it's not incredibly wonderful for consumers. It wasn't designed to be good for consumers. It was supposed to be good for the airlines."
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