The push for metal neutrality continues!
During an airline conference in Houston today, United CEO Jeff Smisek announced that United Airlines is interested in forming a trans-border joint venture with Air Canada and a joint venture with an airline or airlines in Latin America.
Joint ventures require regulatory approval and are more than just marketing agreements. Carriers craft flight schedules together, deciding what time to fly between destinations and how much to charge for tickets. Furthermore, they share the route’s profits instead of competing with one another.
United already has entered a joint venture with Germany’s Lufthansa and Air Canada for transatlantic routes and recently won approval for a joint venture with Japan’s All Nippon Airways.
Today, Smisek expressed hope for further partnerships:
“Latin America is an area that we’re keenly interested in,” Smisek said. “We’re also looking at potentially having a transborder joint venture with our friends at Air Canada.”
Winning the award for random statement of the day, Smisek added, "Our loyalty program has more members than there are French citizens worldwide. It’s a huge program." Indeed it is–and that may encourage LATAM, the merged airline of Chile’s LAN (currently a OneWorld member) and Brazil’s TAM (a Star Alliance member) to decide to join Star Alliance over OneWorld.
Naturally, American Airlines will seek their own joint venture with LATAM, but the fact that United is now world’s largest airlines and Star Alliance has more members and reaches more places than either OneWorld or SkyTeam may make a partnership with United and a migration to Star Alliance more likely.
Update: Added clarification of trans-border – thanks Hans for pointing this out
“We’re also looking at potentially having a transborder joint venture with our friends at Air Canada.”
That’s kinda weird. United-Continental, Lufthansa, and Air Canada already have a trans-atlantic joint venture. Look at any trans-atlantic fare and you’ll see identical pricing from UA, LH, CO, or AC. And they’re totally interchangable: for instance if you fly a roundtrip from LAX to FRA, you can fly LAX to IAD on UA, IAD to YYZ on AC, YYZ to FRA on LH, FRA to IAH on CO, IAH to LAX on UA. As long as everything’s in the same fare/booking/inventory class, it’ll price as a through-fare.
In fact, we (I’m a travel agent) have a wholesale contract from UA/CO/LH/AC called the joint venture contract. That’s what those airlines call it.
So I’m really confused by Smisek’s comment about Air Canada. Someone should ask him to clarify.
Oh ho! I see now what Smisek was saying! Trans-border = domestic US/Canada. They already have a TATL JV with AC, he’s talking within the Americas, which is not JV at the moment. You might want to make your post more clear on which areas UA/CO already has JVs and which areas it’s exploring starting a JV.
I guess I still find “trans-border” an ambiguous term. Technically transatlantic is transborder as well. JMHO.
They share revenue so they really don’t care how you get to Europe. What the new United is working toward is to make trips between the US and Canada metal neutral (which from what I’ve seen in pricing for my flights earlier this year is pretty close anyway)