Airline Alliance’s Benefits Explained

Just yesterday, the biggest airline alliance, namely Star Alliance celebrated their 22nd birthday. 5 airlines came together into an agreement to establish the alliance – United Airlines, Scandinavian Airlines (more commonly referred to as SAS), Thai Airways, Air Canada and Lufthansa.

Airline alliances while not new, they were definitely rare at the time. The first ever alliance goes back to the 1930s, when one of the most famous now-bankrupt airlines in the world, Pan American formed an alliance with its subsidiary in Latin America, Pan American Grace Airways.

For many years that followed, airlines entered only into codesharing agreements between two partners. But as the 90s came around, when the Netherlands and the United States signed an open skies agreement between the two countries. The two parties signed the agreement in 1992.

But 5 years later, five major airlines formed Star Alliance. In 1997, the way we travel around the world changed forever.

Airline alliances sound nice and all, but question is – what are the benefits of alliances for airlines and passengers?

Cost saving

Starting out with the pros for alliances, the most obvious one is cost saving. What airlines in alliances essentially do, is that they share various facilities while ensuring the highest quality of service to their passengers.

So, using Star Alliance as an example, Lufthansa and United fly under the same alliance. I want to book a ticket from Los Angeles to Frankfurt. But Lufthansa does not have any ticket offices in Los Angeles (hypothetically), so what do I do? I go to United‘s ticket office.

United Airlines Boeing 747 and a Lufthansa Airbus A380. Source

This saves Lufthansa money, as they do not have to employ ticket agents in Los Angeles. They are under the same alliance so the booking agents will help me book tickets on a Lufthansa flight.

So, as I had to book last minute, I had to pick a flight option with a stop-over. I depart from Los Angeles and have a stop-over in Chicago‘s O‘Hare. The flight from LAX to IAD is operated by United Airlines. Lufthansa saves money here as well – they do not have to operate a route which can be potentially unprofitable for Lufthansa, as the airline is not as popular amongst domestic passengers in the United States like United is.

However, on the previous day, on a flight from Frankfurt to Chicago, the Boeing 747 broke down with a minor issue. Unfortunately, Lufthansa does not have any maintenance facilities in Chicago to repair the Queen Of The Skies (again, hypothetically).

Sharing is Caring

But luckily, United does have its own facilities! So, in order to save costs of transferring maintenance staff from one of their bases in the United States to Chicago, Lufthansa uses United‘s maintenance staff.

Before my flight departs, United‘s mechanics fix Lufthansa‘s aircraft. The German airline saved time and money.

As Flight LH431 departs at 4 PM, I am not hungry, but I‘d like a cup of tea or some light snacks. As I am a Star Alliance Gold member, I can access a premium lounge to fill up before my flight. Lufthansa does not have a lounge at Chicago. However, United does, so I enter their lounge and steal as many Croissants as I possibly can.