Air Transport World

MAKING alliances work

                        Star Alliance facts  Total revenues (bil.)            $45 7  RPMs (bill.)                     232 7  Annual passengers (mil.)         183.9  Number of employees            230,839  Daily departures                 6,692  Number of destinations             642  Countries served                   106  Fleel                            1,446  SOURCE:Star Atlantic      

Painting planes and making promises are easy. The difficult part comes later

airline CEOs carry the front-line burden in the alliance game. They decide on partners and attend signing ceremonies where they promise wondrous benefits to favorite customers. But after the celebratory dinners and public testimonials, employees must follow through on the bosses' promises.

Lufthansa CEO Jurgen Weber is the force behind Star Alliance, which counts as members Air Canada, SAS, Thai International, United and Varig, and is growing. Asked about its permanence, he replies: "We will cooperate forever as long as we like it. But we can stop if it's not win-win. At most we are engaged"-but not married-by virtue of a 2 1/2-page contract. "Anyway, that's usually more fun."

Weber insists that Lufthansa needs alliances. "We can explore the global market, which we couldn't do on our own, with more powerful distribution than before We have the tickets" to prove positive results from alliances.

However, preliminary 1997 figures from the Assn. of European Airlines show that many airlines-with or without global allies and powerful distribution-had double-digit traffic increases on European routes, much of the increases due to their own productivity growth and a favorable economic cycle.

Once allied, the key issue to Weber is "increasing trust in one another. We must sell the others' seats with the same intensity as our own. In some cases, where dukes like to keep their kingdoms, the working level must be reminded, and we have done so."

Paul Paflik, head of airline cooperations for Austrian Airlines, a member of Atlantic Excellence, confirms that sentiment. "It was most difficult at the beginning. Each airline had a different philosophy and not everyone agreed [that] the alliance was of absolute benefit, so we had problems. Strong personalities on both sides had determined why the others worked as they did. Plus Delta was so much bigger than the rest. It had different problems."

Learning to work with other cultures can be a shock. Alitalia's new link with KLM should be a real test. A KLM official suggests, only half in jest: "We may have to learn how to deal with spontaneous strikes on our network.'

But KIM/Northwest, the firs! …

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