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CAPA TV | October 1, 2020

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The Emerging Nature Of Global Partnerships; How Important Is Equity In A New World?

  • On October 15, 2015

Airlines have sought many avenues to cement international partnerships, despite the constraints of ownership and control rules (meanwhile often happily using them to protect vested interests). Among the first early attempts at cross equity-linked alliances involving US airlines were Delta’s Global Excellence, with Swissair and Singapore Airlines in the late 1980s. But it was to be non-equity relationships that dominated the agenda for the next two decades, led by the success of the Northwest-KLM adventure on the Atlantic. These evolved into wider, subsequently global, alliances each built around a US-European airline axis, Star, oneworld and SkyTeam.
The so-called branded global alliances (BGAs) did not rely on equity to bind them, but subsequently developed tiers, such as the sub-alliances in the ATI metal neutral JVs on the North Atlantic. The BGAs still dominate global aviation, with many aircraft now “branded” with the alliance colours.
In the 21st century various ad hoc minority and other equity models have evolved, including the LCC groupings of cross-border JVs in Asia (eg AirAsia, Tigerair, Jetstar), full service airline groups of various kinds in Europe (eg AF-KLM, IAG and the Lufthansa Group) and Latin America (LATAM).
But it was not until Etihad developed an explicit strategy of acquiring substantial minority shareholdings in airlines around the world that the issue of equity came to the fore as a potential alternative. The Etihad Equity Partnership is still a one-off, but there are hints that some Asian airlines would be interested in following suit.
 The branded global alliances are evolving to meet new challenges. Are they moving fast enough?
 Are metal-neutral JVs creating juggernauts, making competition too lopsided?
 Do equity shares offer enduring alternatives for the smaller airlines?
 What other options exist for smaller airlines if they are to get their “level playing field”?
 Is Asia’s trans-national JV ownership model suitable for other regions?
 Is the Etihad Equity Partnership a useful model for others to follow?
 An airport’s perspective on accommodating alliances 

Moderator: CAPA – Centre for Aviation, Executive Chairman, Peter Harbison
 airBaltic, CEO, Martin Gauss
 ANA Holdings, Senior Executive Advisor to the Chairman, Keisuke Okada
 Ethiopian Airlines, CEO, Tewolde GebreMariam
 Finnair, CCO, Juha Jarvinen
 Finavia, SVP Airport Network & Marketing, Joni Sundelin


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