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Air Berlin agreed to join the oneworld alliance and establish codeshare and frequent flyer program deals with American Airlines and Finnair. Subject to government approvals and scheduled to take effect 1 November, the code shares would provide Air Berlin customers access to 26 routes flown by AA and AA customers access to 12 routes--six transatlantic and six within Europe--flown by Air Berlin. Air Berlin is Germany's second-largest carrier, with hubs in Berlin and Dusseldorf. CEO Joachim Hunold during a press conference last week said Air Berlin "has expanded our corporate contracts with major companies in Europe to over 1,300." Of the 160 cities Air Berlin serves worldwide, 50 will "be new to oneworld," notably throughout Central Europe, according to American Airlines president Tom Horton. He told journalists that AA, British Airways and Iberia--now that they have secured antitrust immunity--"have the ability to discuss the future of Air Berlin within that transatlantic joint venture agreement, so stay tuned." During the press conference, oneworld managing partner John McCulloch also fielded questions regarding Air Berlin and other alliance topics. Excerpts follow.
Air Berlin focuses on the leisure and low-cost markets, and doesn't have business class or lie-flat beds. How do you reconcile that within oneworld?
Air Berlin does have a business-class long haul. On the product side, perhaps they differ a little bit today from some of our other carriers, but not all of our carriers have lie-flat business seating. This is a very new agreement, and Air Berlin is looking to use us as much as we are looking to learn from them in terms of how we work. There is no doubt in our minds that Air Berlin fits on the quality spectrum.
In terms of major European markets, that kind of leaves France. Is there a need to have a French partner, or can you cover it yourselves?
There is a limited number of partners in Europe, and we have always stated that we were looking to add a continental European partner. We're done now. We're not looking just to add carriers for the sake of some network coverage. We are excited to add Air Berlin's current network and its expansion plans. So, no we're not, short answer, looking to add in France.
Can you provide an update on potential new partnerships in Latin America?
The big market for us to still look in is Brazil. It already is, and will be, one of they key parts of the world that alliances need to figure in. Of course, we are discussing with the carriers there and also looking for other options within the group to see what we can do. We are making our pitch, along with everyone else, to come up with a solution. After we've looked in Latin America, China and perhaps one or two other regions in the world, that will be it for us.
How will the alliance tackle the capacity surge [between the Middle East and Europe] from Emirates and the other Gulf carriers over the next five or six years?
There is no alliance strategy or discussion. I am not even sure we could if we were so inclined. The Gulf remains something different for alliances. Our strategy has been to find good, regional partners whose networks complement each other.
Do you foresee a time when the oneworld partnership will have a single identity rather than the numerous identities across the member carriers?
No. Our strategy has been that these are individual carriers that maintain relationships with customers, and that oneworld doesn't build a brand that tries to subsume those relationships. People have been writing about alliance strategy for 10 years now. The restrictions on ownership in our industry would indicate that alliances have a role, but no, I don't see it. These are highly independent, strong brands that have come together in an association in which they can endorse each other, feed traffic to each other and learn from each other. But the relationships you are seeing amongst the three big groups will now prove to be pretty permanent. You won't see much changing unless there is consolidation and ownership changes that overlays that.
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