Airline Alliances Explained: Benefits, Major Players, and Ot (2024)

An airline alliance is a partnership between two or more airlines to expand routes, share resources, and establish a seamless travel experience for international passengers who get access to multiple destinations and more convenient airway connections.

The participating airlines carry out mutually-agreed upon commercial policies, coordinate the scheduled flights, and ensure high quality of services and security standards. At the same time, they maintain a high degree of financial independence and preserve brand identity.

It’s impossible to belong to more than one alliance at the same time. By doing so, a carrier can definitely expand its market reach, but such a situation would decrease the ability of other member airlines to stay competitive.

Yet, alliance members may go into other forms of partnership — like a codesharing agreement or joint venture — with other airlines, no matter whether they belong to the same alliance or not.

For example, Air India is a member of Star Alliance and also has a joint venture agreement with a smaller Indian-based alliance the Tata-SIA Vistara. Another example is China Southern Airlines that is a member of SkyTeam and also has a strategic partnership with American Airlines. We’ll discuss these types of partnerships later on.

There are three key benefits airlines get when joining a global alliance.

Increased market coverage. Member carriers can expand their networks without investing in new aircraft. Instead, they offer new destinations and longer routes to their passengers by picking up and connecting existing partner flights.

Lower operational costs. Within an alliance, airlines can share resources and important facilities such as lounges, terminal space, ground handling services, or maintenance bases. They also may run common marketing programs and use the same IT system. All these reduce overall costs while still guaranteeing a consistent level of service.

Customer satisfaction. Members of an alliance work together to provide their passengers with the following benefits:

Currently, there are three global airline alliances operating in the air travel industry — Star Alliance, SkyTeam, and Oneworld. According to a global travel data provider OAG, they account for 43 percent of total seating capacity. Below, we’ll have a closer look at each of the Big Three.

Founded: 1997

Headquarters: Frankfurt, Germany

Membership: 26 airlines

Coverage: 195 countries (98 percent of the globe), 1,330 destinations, 762 million annual passengers, 19,000 daily departures, 1,000 lounges

Star Alliance was launched in 1997 by five founding member carriers: Lufthansa, Air Canada, Thai Airways, SAS, and United Airlines. The alliance’s mission is to provide seamless service to international passengers and improve the customer experience for travelers. At present, Star Alliance comprises 26 member airlines, including the world’s top carriers, each having its distinctive culture and services. It operates nearly one in six seats globally, with United Airlines accounting for 21 percent of the alliance’s capacity.

Star Alliance does not have a single frequent flier program. However, all its member airlines run individual programs and, by joining one of them, a passenger is empowered to earn and redeem miles or points across the entire network. Travelers can join several programs but since airlines manage them separately, there is no way to transfer miles between them or combine them into one.

When passengers reach elite status levels with a chosen program, they automatically gain one of two status levels offered by Star Alliance and acquire a card with either a Gold or a Silver status logo on it.

Silver status comes with two benefits — priority reservations waitlist and priority airport standby.

Gold status also includes

Founded: 2000

Headquarters: Amsterdam, Netherlands

Membership: 20 airlines (Aeroflot was temporarily suspended in 2022 and Virgin Atlantic joined up in March 2023)

Coverage: 184 countries, 1,100 destinations, 588 million annual passengers, 10,084 daily departures, 750 lounges

The youngest among the three major alliances, SkyTeam was established by Aeromexico, Delta Airlines, Air France, and Korean Air in 2000. In 2022, Aeroflot was temporarily suspended shortly after the full-scale Russian invasion of Ukraine. However, Virgin Atlantic has joined the SkyTeam in March 2023. So at present, SkyTeam includes 20 airlines.

The suite of business products includes the following five offerings.

Global Meetings is designed to save companies time and money on international event travel. Attendees book flights with discounts of up to 15 percent or benefit from promotional fares. Organizers, in turn, get personalized services, including a dedicated account manager to help with travel arrangements. Besides, they earn one reward ticket for every 50 passengers traveling to an event with Global Meetings. The program is available for events that have a minimum of 50 participants traveling by air and originating from at least two different countries.

SkyTeam Corporate Agreements simplify cooperation with airlines and centralize travel management for global enterprises. Instead of signing multiple bilateral agreements, they enter into one partnership — with the SkyTeam alliance.

SkyTeam China Corporate Connection targets China-based companies. They can sign a corporate agreement with 3 to 12 member airlines and get access to nonpublished fares with discounts.

SkyTeam Marine and Offshore offers pricing, ticketing, and support services to travel management companies servicing clients from shipping, offshore oil and gas, and alternative energy industries. The program focuses on movement of crew personnel from or to ships, offshore drilling sites, and energy farms.

Similar to Star Alliance, SkyTeam doesn’t have a separate frequent flier program. Instead, passengers can join a program with any of the SkyTeam’s member airlines that best suits their needs and earn miles across flights operated by the alliance.

At the same time, the alliance grants Elite and Elite Plus Status Levels to loyal passengers who earned enough miles with their preferred frequent flier programs.

Elite passengers take advantage of

Founded: 1999

Headquarters: Fort Worth, Texas, USA

Membership: 13 airlines (+ a connect partner Fiji Airways)

Coverage: 170 countries, 900 destinations, 8 million annual passengers, 11,000 daily departures, 620 lounges

Oneworld is the smallest global airline alliance. It was established in 1999 and is now headquartered in Fort Worth, Texas, USA. There were four founding carriers: American Airlines, British Airways, Cathay Pacific, and Qantas. At present, Oneworld consists of 13 airlines.

The Round the World Airline Tickets are branded fares that provide access to hundreds of destinations in 170 areas. There are three types of Oneworld Round the World trips.

Explorer (a continent-based fare) helps passengers travel from city to city, as well as from continent to continent.

Global Explorer (a distance-based fare) grants access to an extensive list of airlines (such as Bangkok Airways, Aer Lingus, Oneworld connect partner Fiji Airways, Jetstar, Jetstar Asia, Jetstar Pacific, WestJet, Qantas, and others).

Circle Pacific (inter-continental journey for exploring continents that border the Pacific Ocean) would benefit travelers who want to visit multiple continents without actually flying all the way round the world. There are several continents passengers can choose as the starting point and the destination of their journey, such as

Round the World Airline Tickets offers its own booking tool to plan multi-city or multi-continent trips and buy them online.

Now let’s see what loyalty statuses and frequent flier perks are available for passengers flying with Oneworld members.

The same as it is with the rest of alliances, Oneworld doesn’t run an individual frequent flier program, but offers three elite status levels — Ruby, Sapphire, and Emerald. A passenger can achieve them by aggregating miles with a loyalty program from a member airline.

Ruby status has the shortest list of privileges including

The highest status among the three is the Emerald and besides all above-mentioned perks it offers access to First Class lounges and the ability to use a fast track/priority lane security pass to skip the queue at security screening.

Similar to other alliances, Oneworld offers an online tool to search for available lounges.

Interlining is the most basic commercial agreement between airlines that allows them to sell each other’s tickets and services to passengers on itineraries with more than one flight. Interlining was introduced by IATA, the trade association representing the global airline industry in 1947.

Due to interlining, passengers can buy a single ticket for complex itineraries with several flight legs, check in only once, and have their baggage transferred through to the final destination. In case of disruptions, travelers are rebooked to other flights.

One of the airlines signing an interlining agreement acts as a validating carrier that tickets an itinerary and must be a participant of Airline Reporting Corporation (ARC) or IATA Billing and Settlement Plan (BSP.) Others are participating or operating carriers that actually serve legs of the trip.

Codesharing is a commercial agreement between two or more airlines that extends the concept of interlining. The scheme appeared in 1989 when American Airlines and Qantas provided the first connecting flights of this type. In addition to all interlining capabilities, carriers sell seats on each other's flights under their own flight numbers. Travelers booking a flight with, for example, Delta Airlines can find themselves on a flight operated by Air France. Still, the flight will have a Delta flight number.

A joint venture agreement is a partnership between two or more airlines to operate as a single entity on certain routes. This form of cooperation always requires government approvals. Airlines involved in a joint venture share their costs and revenues, and closely coordinate planning and conducting flights.

Joint ventures are typically formed between airlines inside alliances. At present, there are three major transatlantic joint ventures created between the carriers:

Not every carrier, even the large and world-famous ones, can easily enter the airline alliance as it’s always about meeting high standards. Therefore, many of them just can’t be accepted. The ones who can, though, are not necessarily seeing any sense in doing so.

Say, low-cost carriers (LCCs) operate on a different business model, and the strategies used by global alliances are simply not beneficial to them. LCCs focus on optimizing operations, reducing a number of services, and using secondary airports to offer low fares on regional flights. This is the opposite of what alliances typically propose (long-haul destinations, high-quality services, access to lounges, etc.)

No wonder, LCCs aren’t part of global associations. Yet, they still can form their own groups. As for now, Value Alliance, created in 2016, is the only functioning unit of this type. It's composed of six budget carriers with a combined fleet of 180 planes operating in the Asia Pacific market.

The alliance serves over 160 destinations from 17 hubs across Australia, North Asia, and South East Asia, covering a third of the world. This makes it the world's fourth largest alliance. Passengers can build itineraries across the network and buy a single ticket at a competitive price via a standalone booking system.