CAPA Airlines in Transition Conference - CEOs discuss alliance membership

May 3, 2012

Datalex recently sponsored the CAPA Airlines in Transition Conference in Istanbul. An airline CEO event, it covered a broad spectrum of ills and remedies affecting the industry. One of the more interesting insights was the general opinion, echoed by a number of CEOs, that membership of a global alliance did little to fuel innovation and growth, or improve services for the small to medium sized airline. By far the most effective strategy for such airlines was to follow more bilateral agreements with partner airlines that could extend network reach, provide more substantial feeder numbers from markets which matter. In addition there needs to be a like-minded management culture in order to make it work, and not appear as purely a CEO-CEO quest.

Carriers that contributed single digit percentages to the alliance had very little say, or room, at the alliance decision table. At the same time these smaller airlines have to pour significant funds into maintaining complicated integration standards which do not produce the ROI. The cost of maintaining such integration is not proportionate between the biggest and smallest alliance member, and therefore it becomes a more critical and difficult justification.

Peter O’Kelly

Commercial Director, Datalex

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