Wednesday, July 7, 2010 - Shopping for Perks Among the Big Airline Alliances

From: Wall Street Journal

Airlines pitch their global alliances as seamless networks, yet there are so many hitches that consumers may want to shop around.

Alliances have existed for more than a decade as airlines have sought to market themselves jointly. But the companies have found that splicing together computer systems and competitive instincts has been difficult and is still evolving. As a result, perks and policies vary among each of the three big alliances—Star, oneworld and SkyTeam.

Certain Air France fliers can't earn Delta miles, though both are in the same alliance.

"There are still really deep pockets of incompatibility. It's not always what it's cracked up to be," said Randy Petersen, publisher of frequent-flier magazines and founder of the website

For example, using mileage points for a free ticket or to upgrade from a coach ticket to business class is generally easier if you're flying one of the member airlines in Star Alliance than in oneworld or SkyTeam. Meanwhile, access to fancy lounges is often better for elite-level frequent fliers at oneworld. And the simple act of earning miles for flights isn't the same across all alliances, or even among airlines within the same alliance.

If you're a Delta Air Lines Inc. frequent flier, for instance, and you pay $1,297 to fly to Europe on Delta's SkyTeam partner Air France, you probably expect to collect Delta miles. But there's a catch: Delta doesn't give you miles if your ticket, like this one, is among Air France's five lowest fare classes.

A Delta spokesman said the airline follows Air France rules to align with what partner airlines offer their own customers. Other carriers in other alliances do the same. "It is something on our list to improve as we align pricing and fare classes," the Delta spokesman said.

For airline alliance members to be able to coordinate fares and schedules and operate joint ventures, they must have antitrust immunity from the U.S. Department of Transportation. Key airlines in the Star and SkyTeam alliances already have this.

Big airlines in the oneworld alliance including AMR Corp.'s American Airlines, British Airways Plc and Japan Airlines Corp. are likely to soon win antitrust immunity, perhaps by the end of this month. DOT has already granted preliminary approval. This will make oneworld more competitive with the other alliances, especially to Europe. Currently American and British Airways can't offer frequent-flier miles or awards on each other's trans-Atlantic flights—a significant disadvantage for oneworld customers.

For frequent travelers, alliances have gotten so important for earning and redeeming miles and offering perks that picking an alliance may be more important than picking an airline.

"Competition used to be strictly between airlines. But competition is really happening between alliances now," said Christian Klick, a Star Alliance vice president.

For consumers, the biggest perk of alliances is mileage: You can earn miles in your home airline's frequent-flier program and redeem them on lots of carriers around the globe, and you can fly on far-flung airlines and still earn miles and status in your home airline's program.

There are other benefits. Top-tier frequent fliers—those in the higher categories of elite status—typically get access to airport lounges at partner airlines. And your elite-level frequent-flier status gets recognized by other alliance members, so benefits like priority check-in, boarding, standby status and baggage service are good on lots of airlines.

Star, which was the first global alliance with its launch in 1997, is by far the largest of the three alliances with 28 airlines and 1,172 destinations. It gained ground in the U.S. last fall when Continental Airlines Inc. left SkyTeam and joined Star. Star is the only alliance with multiple U.S. members: UAL Corp.'s United Airlines, Continental and US Airways Group Inc.

Oneworld, which has 11 airlines and 727 destinations, says it has focused on quality and not quantity. Cathay Pacific Airways Ltd. and Qantas Airways Ltd. typically get very high marks among travelers for premium service, reliability and facilities, for example. Oneworld also claims big airlines in key business-travel markets: London, Hong Kong, Tokyo and New York.

One place it is lacking: mainland China, where oneworld has no partner.

SkyTeam, a collection of 13 airlines offering 898 destinations, has adopted a similar stance, saying that while it lacks size, it is made up of "regional champions" such as Delta, the largest carrier in the U.S., and Air France-KLM, the largest in Europe.

Which alliance is best for you really depends on what you want when you fly. Here's a guide, and picks of top choices in different categories, based on a close study of alliance policies, discussions with alliance officials and consultation with several frequent-flier experts.

Upgrades-Top Choice: Star Alliance

Using miles to upgrade a coach ticket to business class, or even business class to first class, is one of the best benefits of frequent-flier programs. Most airlines offer it, but the ability to use miles to upgrade on alliance partners is much more difficult.

Star Alliance has the most liberal policy. You can use miles to buy upgrades to business class from most coach fares on 17 of the 28 Star airlines.

Oneworld doesn't allow any upgrades using miles on partner airlines. SkyTeam allows some upgrades using miles, but only if you first buy a full-fare coach ticket.

Lounge Access- Top Choice: Oneworld

For road warriors who want the showers, food, bars and comfortable work or rest spaces of fancy airport lounges, travel experts say oneworld currently has the strongest offering, though Star is close.

Oneworld gives top-tier elite members access to fancy lounges, even when they are flying coach. And the lounges that oneworld can offer are exceptional: British Airways, Cathay Pacific and Qantas are all known for outstanding airport clubs.

"Oneworld is excellent as far as elite benefits go," said Ben Schlappig, a connoisseur of frequent-flier programs who writes the One Mile at a Time blog at

Star also offers lounge access to top-tier frequent fliers when flying abroad. Neither Star nor oneworld offer lounge access to the lowest level of elite frequent fliers, typically those that fly at least 25,000 miles a year.

SkyTeam can be more restrictive. In addition to the lowest level of frequent fliers, some mid-level elite members also are excluded from lounge access, such as the gold level at Delta, which requires earning 50,000 miles a year.

Redeeming Miles for Award Tickets - Top Choice: Oneworld

If it's free tickets that you really want out of an airline, then you'd be wise to consider Star Alliance. It is considered to have the best availability of frequent flier award tickets by dint of having the most airline members.

That's a key thing since travelers often complain about airlines being skimpy with frequent-flier awards. The ability to redeem seats with miles on other airlines makes it easier to actually use your miles.

Star Alliance increasingly makes it easy for members to book award tickets online on partner airlines. Through a computer system called StarNet, Star Alliance partners post all the seats they make available to mileage awards, and most airlines incorporate that into their own websites. If you can't find seats to Europe on Continental, United or US Airways, you may have better luck with Lufthansa, Swiss, Austrian, Scandinavian or LOT Polish.

"There's little question that Star Alliance is the best for award redemption," said Gary Leff, the member-elected president of "They're the biggest alliance and in general their award availability is the best."

While most Star Alliance members make all open award seats available to customers, United is an exception. It blocks some availability from StarNet. When airlines let you use your miles on partners, they typically end up having to pay the partner for providing the transportation. So it can be cash out the door.

A spokesman for United says Star Alliance members set the price United must pay for each award flight flown by a member of United's Mileage Plus program.

"There are occasions when Mileage Plus may limit the number of award seats available on Star Alliance carriers," the spokesman said. "These occasions primarily occur when United has direct or connecting service to the destination and United award seats are available."

Oneworld says its members have agreed to make reward seats equally available—if one carrier offers the seats, all must offer them. The alliance hopes that can be a "competitive advantage," said spokesman Michael Blunt.

Comparing Global Alliances

Which airline alliance is right for you? A look at what the big three offer.

Airlines 281113
Airports served1,172727898
Key membersUnited, Continental, US Airways, Lufthansa, Singapore, ANA, Air Canada, Thai American, British Airways, JAL, Iberia, Cathay Pacific, Qantas, Finnair, LANDelta, Air France-KLM, Korean, Alitalia, Aeroflot, Aeromexico
Lounges; lounge access990; all elites except bottom level550; all elites except bottom level447; only top-tier elites
Can you use miles to upgrade?Most airlinesNoOnly on full-fare coach tickets
Redeeming miles for award tickets The alliance has the most airline members and offers widespread sharing of inventory among partners. Restrictions on American Airlines and British Airways limit options to EuropeDelta and Air France both had low availability in a recent awards test
Do key airlines have antitrust immunity?YesLikely soonYes
The Middle Seat's overall grade A-minus B B-minus

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