Airline alliances are partnerships between two or more airlines that agree to
cooperate on a substantial level, with the goal of increasing connectivity, reducing
operational costs, and providing seamless travel experiences for passengers. The
three major airline alliances in the world are Star Alliance, SkyTeam, and Oneworld. In
addition to these, there are other agreements made between two airlines that benefit
both parties involved, such as interline agreements, codeshare agreements, and joint
venture agreements.
Interline agreements are the most basic level of cooperation between airlines,
where airlines handle passengers when they're traveling on multiple airlines on the
same itinerary.
Codeshare agreements are agreements between two airlines in which an airline
places its designator code on a flight operated by another airline to increase
efficiency in operations and save costs.
Joint venture agreements are agreements between airlines to share revenues on a
route according to an agreed contract, and they also coordinate on route planning
and scheduling.
Alliances can have benefits for airlines, such as increasing connectivity and reducing
operational costs, but they can also have drawbacks, such as reducing competition
on certain routes and making travel expensive for passengers. Alliance agreements
can also lead to less efficient communication between the involved airlines, complex
management structures, and disagreements between alliance members.
Airlines can operate without being part of an alliance and still be successful. An
example of one such airline is Emirates. It is one of the largest airlines in the world,
and it operates without being part of any major alliance. It operates on the hub-andspoke
model, with Dubai as its hub, and has many partners through which it shares
interline, codeshare, and joint venture agreements. For example, Emirates signed a
joint venture agreement with Qantas in 2013 to share revenue and passengers
through Emirates' giant hub in Dubai, mainly on routes to Europe. This opened up
frequent flyer opportunities between the two airlines, and passengers of each airline
had access to many more destinations.
Low-cost carriers are typically not members of any of the three major alliances
because alliances have certain criteria that need to be met. However, low-cost
carriers can still benefit from partnerships with other airlines and operate successfully
without being part of an alliance.
Sometimes, low cost carriers form an alliance among themselves, as they share the
same business principles. Examples of such alliances are Value alliance and U-fly
alliance.