Member carrier CEOs review 2015 and agree on priorities for 2016. Connecting Partner Model approved.
The Star Alliance Chief Executive Board (CEB) met this week for its annual review of the aviation industry landscape, the performance and competitive positioning of the Alliance and to analyse progress in optimising the travel experience for customers.
At the Chicago meeting, hosted by founding member United, the Chief Executives of the Star Alliance member airlines took a look back at the network developments, advances in technology and individual airport projects completed in 2015 and set the agenda for the coming year.
The route network was expanded in July with the joining of Avianca Brasil, adding some 15 destinations to the Alliance’s global route map and securing domestic connectivity in Latin America’s largest country and economy. At the same time, many Star Alliance carriers launched new long-haul routes throughout the year, with a particular focus on linking Alliance hubs. For example, Air New Zealand, ANA and EVA Air started services from their respective home hubs to United’s Houston hub in 2015. In total, the Alliance carriers currently operate nearly 100 more hub-to-hub connections than a year ago.
“It is clear that the Star Alliance member airlines are committed to offering the best possible connections so as to increase customer choice,” said Mark Schwab, CEO Star Alliance. “It is notable that in the last year this was driven mainly by organic growth, rather than membership expansion. Together we are honing our network and making it easier and faster to connect.
This route expansion is already set to continue in the coming year. As examples, United will introduce a new service to Auckland, Lufthansa will serve Panama City, Singapore Airlines launch flights to Düsseldorf and Scandinavian Airlines add a service to Los Angeles.
The CEB also approved Star Alliance’s new Connecting Partner Model, under which the Alliance’s network reach will be expanded by connecting routes served by “low cost” or “hybrid” airlines. South African airline Mango will be the first airline to introduce the new concept during quarter three 2016.
On airport projects, the opening of Heathrow Terminal 2 – the Queen’s Terminal in June 2014 remained a focus, with close attention paid to the first full year of operations. The project was deemed to have met its twin goals of enhancing the customer experience and driving value for the member carriers by introducing many common processes. The fact that Heathrow Airport and Star Alliance jointly received the Air Transport World – Airport of the Year Award – the first time that this award was given to a specific terminal – was seen as a strong measure of the project’s success.
However the CEOs noted there was still some fine-tuning to be done at Heathrow so as to further improve the customer experience during 2016. Star Alliance will continue to work to ensure that Air India can join other Star Alliance airlines in Terminal 2 in the course of next year.
The Heathrow project, and the experience gained from the day-to-day running of new common processes in the terminal, is now being used to enhance customer experience at other airports. The model is particularly suitable for locations where existing infrastructure issues or space constraints are limiting operations. Current examples are Sao Paolo’s Guarulhos, Tokyo Narita and LAX in Los Angeles.
In addition, the Alliance is continuing to lobby airports across the globe to convince them of the value of bringing alliances in as a planning partner during the early planning phases of new airports and terminals.
2015 also saw the enhancement of Star Alliance Gold benefits, with the introduction of dedicated security lanes under the Gold Track branding. Available to First and Business Class customers as well as Star Alliance Gold Card holders, Gold Track is currently available at around 70 airports worldwide. More locations will be added in 2016 along with the introduction of Gold Track Immigration at selected airports.
Over the past years the Alliance has also invested into the Star Alliance branded lounge product. New lounges were opened in Buenos Aires, Los Angeles and Sao Paulo, while the existing property at Paris – Charles de Gaulle Terminal 1 was given a complete makeover. Underpinning the positive customer feedback, the Los Angeles Lounge received SkyTrax’s Best Alliance Lounge Award.
Eligible customers have access to more than 1,000 lounges across the entire network and many Star Alliance member carriers have been actively investing in improving their own lounges. This trend is set to continue in 2016 with several key projects already under way. In parallel, Star Alliance is at present evaluating the introduction of new lounges at several locations where a shared lounge is an economically more viable option than carrier own lounges.
On the technology front, Star Alliance has over the past years invested into developing and implementing “plug & play” systems. This concept allows any member carrier to link their IT systems into a hub operated by the Alliance, rather than having to create bilateral IT links to all other member carriers. The first of these hub products replaced the former airline-to-airline through check-in product, allowing Star Alliance carriers to issue boarding passes for all connecting flights on virtually any combination of interline itineraries.
2015 saw the full implementation of two additional IT hub applications for the Frequent Flyer Programmes (FFP). The first modernised the way FFP accrual data is exchanged between the member airlines, thereby all but eliminating the need for retroactive mileage crediting. The second ensured a near instant update of the roughly 20,000 daily frequent flyer status changes across all 28 member carriers. In other words, as soon as a FFP card holder achieves Star Alliance Gold or Silver status, this change is updated in all systems, so that customers can be afforded their status benefits as soon as they qualify.
Building on the IT hub technology, the Alliance will be introducing further technological innovations in coming years.
Summing up, the CEOs agreed that Star Alliance will continue to grow its global network by optimising connectivity with the aim of extracting more value from the network and introducing the Connecting Partner model. Customer experience is to be further enhanced by raising the consistency of the travel experience across the entire network. Last but not least, the Alliance would pursue a strategy of further incorporating new front- and backend technology to support its business.