Get a Fresh Look at Your Air Alliances

Continental Airlines will switch from the SkyTeam to the Star alliance later this month.  This will affect planeloads of frequent travelers, but what are the procurement implications?

The major issue is the extent to which each alliance’s capacity to serve your account will change. Buyers who use Continental significantly will want a fresh look at how well the Star Alliance (led by United, Lufthansa, Air Canada, Singapore Airlines and now Continental) can serve your travel footprint.  If you can put more spend with the Star Alliance, you may be able to get bigger savings. 

Likewise, now that the SkyTeam is losing Continental, with no replacement, you need to assess how well the SkyTeam airlines (Delta, Northwest, Air France/KLM, Korean Air and others) can continue to serve your travel program.

The easiest way to do this is pull a spend report by airline, and group the airlines by alliance. The three major alliances and their members are oneWorld, SkyTeam and Star.  That will give you a very rough understanding of the potential impact.

If you want a much more valuable analysis, you should model how much spend you could put onto the Star airlines.  The key to this analysis is to model interline connections.  Interline means connecting between different airlines; e.g., a CO flight connecting to a UA flight.  Online means connecting within the same carrier, so a CO to a CO flight.

You’ll want to know how your travelers may be able to reasonably use a combination of Continental and United flights to get to their domestic U.S. destinations, and how this compares to the reduced potential of using Delta and Northwest connections.  The more complex, but potentially more valuable, analysis is how your international spend can be shifted between the alliances.

This modeling is far from easy, but it is the key to uncovering potential savings by re-negotiating your airline deals.  I know the good folks at TRX Travel Analytics can do interline connection modeling, and perhaps the consulting shops within American Express, Carlson Wagonlit and BCD Travel can as well.

While this is not an urgent issue,  it is an important one for any buyer looking to manage their travel program strategically.  If that’s you, get in touch with a qualified consultant to help sort out your options.

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