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Oneworld Airline Alliance Makes Unprecedented 10 Percent Fare CutFebruary 3, 2009 By: George Dooley
In a dramatic move, oneworld global airline alliance is celebrating its 10th anniversary by announcing a consumer fare cut of 10 percent for 10 weeks worldwide as well as new Circle Atlantic regional consumer fares. Included in the oneworld announcement are online enhancements that make booking flights on all member airlines easier. The move impacts consumers whether they are frequent flyer award redemption flights or regular tickets.
The 10 percent cut in the price of all of oneworld consumer fares for 10 weeks will underscore that oneworld offers a wider range of alliance fares than all of its competitors, the alliance said. It will also focus attention on the alliance's ability to offer choice for business travelers or student backpackers. The alliance said it earned more than $850 million for oneworld’s member airlines last year.
The new Circle Atlantic tickets, available today, include up to 16 flight segments between destinations throughout Europe, the Middle East, North and South America. The prices are available until April 23 and range from $3,150 from the U.S., $1,728 from the UK, $2,038 from Euro-zone countries and $2,700 from Chile. Passengers must start and end their trip in the same country, traveling along the way in one continuous circle in either a clockwise or counter-clockwise direction.
Flights can be on any of the oneworld airlines with flights— American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malév Hungarian Airlines and Royal Jordanian and their affiliates, including LAN Argentina, LAN Ecuador and LAN Peru. Mexicana will participate in the fare when it joins oneworld later this year.
The alliance also revealed the progress it is making on the revenue and cost fronts. In oneworld’s first 10 years, it generated $5 billion of revenue for member airlines through its alliance fares and sales activities alone. About two-thirds of this— more than $3 billion— is regarded as incremental revenue, sales that would not have been generated if oneworld did not exist. Savings from identifiable joint procurement activities alone during oneworld’s first decade have totaled about $320 million.
Oneworld is the only alliance without any members that have declared bankruptcy. It also represents the industry’s most profitable collection of airline companies, generating net profit of $11.3 billion in the alliance's first decade versus $9.3 billion by the many more members in Star Alliance and collective losses of $19.5 billion by SkyTeam carriers.
The anniversary also comes at a time when alliance partners American, British Airways, Iberia, Finnair and Royal Jordanian are seeking transatlantic antitrust immunity that would enable oneworld to compete on more equal terms with alliance competitors that have enjoyed this capability for many years.