Global ties between major carriers are set to tighten this year as several joint business agreements near approval, and the global alliance structure could see its first major shakeup in quite some time.
American Airlines hopes its revived joint venture with Qantas will get approval from U.S. regulators within the first half of this year, perhaps even within the first quarter. The Department of Transportation rejected its previous attempt at securing approval in November 2016, but the carriers refiled last year.
American also refiled its DOT application related to Brazil, after the U.S. and Brazil signed their Open Skies agreement last year, so American also hopes to finalize approvals of its partnership with Latam in 2019.
That’s not the only pending JV within the Americas. Delta and WestJet last year signed a definitive agreement, and the carriers together plan to grow their transborder service and add new markets. November analysis from the CAPA Centre for Aviation said the DOT likely will not reject that JV, “given Air Canada’s heft in the U.S.-Canada transborder market.” CAPA also said the Delta/WestJet partnership likely is prompting United and Air Canada—which have held antitrust immunity since 1997 but do not have a JV—to examine their own ties this year.
United already is working to get approval of a JV with Copa and Avianca, announced late last year, and Air Canada is building a JV with Air China, the first such agreement between a Chinese airline and a North American airline.
Existing alliances are getting tighter, as well. Delta, Virgin Atlantic and Air France-KLM are working to combine their various agreements into a single JV. In December, JetBlue, which is contemplating its own service to Europe, filed a motion urging the DOT to look carefully at the effect on transatlantic competition of an agreement between Delta, Virgin Atlantic and Air France-KLM. Aer Lingus, meanwhile, in December filed with the DOT to join the transatlantic JV between American, British Airways and Finnair.
Among the global alliances, Oneworld seems the likeliest to see significant membership changes this year. China Southern, which has investments from Oneworld members American and Qatar Airways, has left SkyTeam, leading to speculation that it will join Oneworld. That likely would meet resistance from Oneworld’s Cathay Pacific, and analysts have said it could push Cathay to Star Alliance. Qatar, meanwhile, has threatened to leave Oneworld amid its continuously sour relationship with American.
All of that, of course, remains speculation. Oneworld did, however, close out 2018 announcing its first new member in several years: Moroccan carrier Royal Air Maroc, which will be implemented into the alliance in 2020.
One other airline to watch in the partnership space this year: Southwest Airlines. The carrier is now more than a year beyond its adoption of the Amadeus reservations system, which enables codesharing partnerships and interline agreements that were not available on its previous system. As Southwest executives have said such partnerships would bring value to the company, it would not be surprising to hear the first of those announced this year.