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Abu Dhabi, UAETuesday 18 December 2018

Oneworld airline alliance mulling low-cost long-haul members to fill market gaps

Alliance creates Oneworld Connect, a new membership tier with Fiji Airways becoming the first partner

Fiji Airways is in talks with Boeing and Airbus for an order of widebody jets to renew its fleet as it boosts long-haul services. Courtesy Fiji Airways
Fiji Airways is in talks with Boeing and Airbus for an order of widebody jets to renew its fleet as it boosts long-haul services. Courtesy Fiji Airways

Global airline alliance Oneworld, which include British Airways and American Airlines, is considering the case for adding members from the ranks of low-cost long-haul carriers and is easing requirements for entry of smaller carriers.

Oneworld introduced a new membership tier, Oneworld Connect, that will enable the 20-year old alliance to expand its network by adding airlines that may not have the size or capability to become a full member, Robert Gurney, Oneworld chief executive, said at the International Airt Transport Association annual meeting in Sydney on Sunday. As the alliance seeks to fill the gap in niche untapped markets, Fiji Airways will become the first member of Oneworld Connect and may deepen relations with member airlines through joint ventures.

“It will have a role to play as the low-cost, long-haul model evolves,” Willie Walsh, chief executive of British Airways parent IAG, said at the media briefing. “If it makes sense to do it, Oneworld as demonstrated today is flexible enough to be able to respond to these opportunities.”

Low-cost long-haul air travel has shaken up the industry, forcing established carriers to set up budget subsidiaries or reduce fares. The trend has gained fresh momentum as new fuel-efficient long-range aircraft help keep the costs down. Lufthansa started its budget unit Eurowings, IAG entered the market with its Level brand and Japan Airlines will start a low-cost carrier to tap Asian demand for budget air travel.

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To be eligible to join the Oneworld Connect programme, airlines will have to meet basic requirements including the IATA Operational Safety Audit (IOSA) standard and gaining the sponsorship of three Oneworld members.

The alliance is in talks with more carriers in Asia-Pacific, Europe and the Americas to join the Oneworld Connect programme, Mr Gurney said, declining to reveal specific airlines.

The Oneworld Connect tier is a “scaleable model” and will help push the alliance into the 21st century, removing obstacles for airlines with attractive networks to join due to stringent requirements, he said.

Passengers on the Oneworld Connect airlines will have access to priority check-in desks for all Oneworld Emerald, Saphire and Ruby frequent fliers and priority boarding where available. However the benefits are limited as they will only be able to earn and redeem air miles between Oneworld Connect partners and their Oneworld sponsors.

Fiji sees the opportunity to deepen relations with Oneworld members through joint ventures and guidance on plane orders as it starts a campaign to grow its fleet of 18 aircraft, a mix of Airbus A330s and Boeing 737s, Andre Viljoen, chief executive of Fiji Airways, said.

Fiji Airways and British Airways are currently discussing areas for potential “bilateral cooperation,” according to a Oneworld statement.

Fiji, which codeshares with American airlines, Qantas and Cathay Pacific, has 21 destinations in its network. Last year it earned $452 million and carried 1.6 million passengers.