The United States Department of Transportation (DOT) has just issued final approval for Aer Lingus joining the oneworld transatlantic joint venture, which comes just over a month after tentative approval was issued for this. What does that mean?
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The Aer Lingus & oneworld relationship
In 2015 Aer Lingus was taken over by International Airlines Group (IAG), the parent company of British Airways, Iberia, and Vueling.
Aer Lingus and oneworld have quite a history:
- Aer Lingus was part of the oneworld alliance until 2006, at which point the airline pulled out, to focus more on being a low cost carrier
- When IAG took over Aer Lingus, there had been talk of the airline once again joining oneworld
- IAG CEO (at the time) Willie Walsh had initially said that Aer Lingus would likely join the oneworld alliance and the oneworld transatlantic joint venture by 2017
- Then in 2017, Aer Lingus’ CEO (at the time) indicated that the airline no longer had plans to join oneworld
As you can see, the airline and its parent company have gone back and forth on Aer Lingus joining oneworld, and as of now it seems like it’s not going to happen. However…
Aer Lingus has gone back and forth on joining oneworld
Aer Lingus approved to join oneworld transatlantic joint venture
In late 2018, a filing with the US DOT requested antitrust immunity for Aer Lingus to join the oneworld transatlantic joint venture, which includes American, British Airways, Finnair, and Iberia. In other words, Aer Lingus wouldn’t join oneworld, but would join the transatlantic joint venture, whereby these airlines coordinate schedules and fares across the Atlantic.
Well, it has been nearly two years since that happened, and the US DOT has now granted final approval for Aer Lingus to join the oneworld transatlantic joint venture.
A few concessions are needed for this to happen:
- Royal Jordanian has technically been part of this agreement, even though it hasn’t been part of the revenue sharing joint venture; Royal Jordanian will have to be removed from this agreement, which shouldn’t have practical implications (the airline will continue to be part of oneworld)
- The airlines must continue to make slots available to other airlines at Heathrow, as requested by the UK Competition and Markets Authority (CMA)
- This approval will need to be revisited in five years time
With Aer Lingus having now received final approval to join the oneworld transatlantic joint venture, I’m curious to see how long it takes for Aer Lingus to actually start participating.
A couple of months ago I might have wondered if market conditions changed to the point that the airlines wouldn’t follow through on this, but I don’t think that’s the case anymore. For example, Aer Lingus plans on launching transatlantic flights from Manchester as of summer 2021, and clearly the intent is that this new agreement will make that viable.
Finnair is also part of the transatlantic joint venture
Is Aer Lingus joining the joint venture a good thing?
An airline joining a joint venture is good or bad news, depending on how you look at it.
On the plus side, it would mean that more passengers would likely receive benefits when flying with Aer Lingus, including the ability to earn and redeem miles. It would also allow airlines to better coordinate flight schedules, and to maximize connectivity for passengers.
That’s a positive, but there’s also a huge downside. Joint ventures essentially operate as a single business, so it would be the equivalent of eliminating a competitor in the marketplace. Aer Lingus would go from competing with American and British Airways to simply being part of their overall flight options.
What are some potential implications of Aer Lingus joining the oneworld transatlantic joint venture?
- Dublin is known for having amazing business class fares on oneworld if you’re willing to connect, so you can expect those to increase, since Aer Lingus has pricing power with its nonstop network
- Currently redeeming British Airways Avios on Aer Lingus is an excellent deal, as the airline doesn’t charge the full fuel surcharges; you can expect this will likely change
- Eliminating a competitor in the market leads to higher fares, as there’s less need to compete, and this even has the potential to push more airlines that aren’t part of one of the big global joint ventures out of markets
- Aer Lingus may cut some of the partnerships it currently has, like the one with United, for example
Will United & Aer Lingus cut ties?
Aer Lingus is perfect for oneworld Connect
With the transatlantic joint venture approved, I think it’s safe to assume that there would be reciprocal benefits across all the airlines, so I’d expect you could earn and redeem American miles on Aer Lingus, etc.
At this point it sure seems to me like the most likely scenario is that Aer Lingus would become a oneworld Connect member. This is a way for an airline to join without paying full fees, and it allows those airlines to offer certain benefits only among select airlines.
Since Aer Lingus has long been hesitant to join oneworld fully, I think it’s likely that this is what’s being angled for.
Fiji Airways is the first oneworld Connect member
Bottom line
The US DOT has approved Aer Lingus joining the oneworld transatlantic joint venture. Last we heard Aer Lingus still didn’t want to join oneworld fully, though I expect a oneworld Connect membership might make sense.
At first I wondered if the airlines would actually take advantage of this approval, but with Aer Lingus launching transatlantic flights out of Manchester, it seems pretty clear that the airline is banking on this.
While the thought of redeeming American AAdvantage miles on Aer Lingus sounds nice, I personally view this as a net negative. This will reduce competition by essentially eliminating a competitor in the transatlantic market.
What do you make of Aer Lingus joining the oneworld transatlantic joint venture?
If Aer Lingus isn't OneWorld, I won't travel on them. Period.
Yes, It is definitely less competition. I guess DOT is supporting the airlines due to the current situation which will not be good once the economy recovers.
Is the United partnership on the chopping block?
If they add the surcharges, that will put a halt to booking Aer Lingus award flights. I refuse to pay BA's surcharge and I won't pay it on Aer Lingus.
Will you be able to credit EI flights to your AA account?
I do agree that as a first step, we may likely see EI joining the oneworld connect platform with AA, BA, FY and IB (+ possibly AS/QR) as partners.
Ever since IAG acquired EI & given IAG’s toes to AA & oneworld, what exactly prevented them from switching over from UA to AA as partner nonetheless? They even went to the extent of cutting ties with QF & CX. Was there some termination penalty that...
I do agree that as a first step, we may likely see EI joining the oneworld connect platform with AA, BA, FY and IB (+ possibly AS/QR) as partners.
Ever since IAG acquired EI & given IAG’s toes to AA & oneworld, what exactly prevented them from switching over from UA to AA as partner nonetheless? They even went to the extent of cutting ties with QF & CX. Was there some termination penalty that they didn't want to pay unless the there was a JV? Or was it that the ex-CEO simply had a different agenda?
The EI/UA cooperation is very small, very limited (IAD-Ireland only) and likely will be discontinued. UA flies to Ireland from some of its hubs already and had an established presence there inherited from the CO merger. DUB is LHR's third runway and a way to shift some cost out of LHR and help lock in higher fares there, once the market recovers. There is no magic or surprise here. EI is part of IAG. It...
The EI/UA cooperation is very small, very limited (IAD-Ireland only) and likely will be discontinued. UA flies to Ireland from some of its hubs already and had an established presence there inherited from the CO merger. DUB is LHR's third runway and a way to shift some cost out of LHR and help lock in higher fares there, once the market recovers. There is no magic or surprise here. EI is part of IAG. It was bound to be the case that it would enter the alliance fully, eventually.
As long as AerLingus is not part of OW I will not consider them in my travel plans. Period.
Lucky: It’s not fuel surcharge BA adds to their redemptions . They’re simply carrier imposed surcharges (coded as YQ on your ticket). They’re ridiculously high. I once checked an OSL-LHR-NRT return ticket in First on BA and they wanted £1600 on top of the miles. Qatar were selling revenue J tickets for about £1300 on the same route.
BAEC has some sweet spots, like upgrades, but longhaul premium tickets on their own carrier are bad value.
This is something else that caught my eye. one of the conditions of approval by DOT is that they will have to DROP Royal Jordanian Airlines from the One World Transatlantic ? What Gives? Jordanians are not as Important to US like The Saudis & UAE? they were The First allies of USA in that minefield.
Why did it take two years to get the approval?
Sorry, just missed the article slightly earlier about B6 initially acquiring slots only at Gatwick and Stansted. I’ve flown out of Gatwick a fair number of times, and honestly it’s more or less as convenient as Heathrow. It just falls behind on connection opportunities and infrastructure, though it’s not lacking for transit accessibility. Given JetBlue aren’t part of any of the major alliances, they may be able to market their flights more towards passengers terminating...
Sorry, just missed the article slightly earlier about B6 initially acquiring slots only at Gatwick and Stansted. I’ve flown out of Gatwick a fair number of times, and honestly it’s more or less as convenient as Heathrow. It just falls behind on connection opportunities and infrastructure, though it’s not lacking for transit accessibility. Given JetBlue aren’t part of any of the major alliances, they may be able to market their flights more towards passengers terminating in London.
I read it as the other joint venture partners – BA & AA – will have to give up some slots at Heathrow to pass regulatory approval. That could work to the benefit of B6, though I’m unfamiliar with the current state of their TATL project. Also...
I read it as the other joint venture partners – BA & AA – will have to give up some slots at Heathrow to pass regulatory approval. That could work to the benefit of B6, though I’m unfamiliar with the current state of their TATL project. Also note that B6 is now a major partner for AA in NYC; American won’t do anything drastic to jeopardize that new business relationship before the ink is even dry. If anything they probably want to help JetBlue in their launch.
This will wind up a shitshow for consumers. And of course, it eliminates my favorite benefit — booking via BA Avios to avoid those pesky surcharges. Drat, foiled again!
Making slots available at Heathrow? As in ... they just locked JetBlue out of Heathrow. I see nothing good for consumers in any of this.
These "joint ventures" sounds more partial/temporary consolidation (without the usual antitrust regulatory considerations) for the purpose of price fixing. lol
With Aer Lingus planning to launch transatlantic services from the UK (Manchester) In 2021, I think it’s a given that they will join the Immunised JV. EI will stand to gain from IAG support as they look to take on DL/VS in the north of England - something BA has little appetite to do under their own ‘flag’. Membership of oneworld is a different matter.
Less competition. Yay.
It's interesting to note Lucky, that the DOT views this as good for passengers from a cost perspective as several of the airlines interline, particularly the IAG ones, which creates double marginalisation as both airlines add their profit margin on the ticket price whereas now they share the profits, they do not.
It also argued that Aer Lingus is such a small part of the transatlantic market (at 3%) that it doesn't really change the...
It's interesting to note Lucky, that the DOT views this as good for passengers from a cost perspective as several of the airlines interline, particularly the IAG ones, which creates double marginalisation as both airlines add their profit margin on the ticket price whereas now they share the profits, they do not.
It also argued that Aer Lingus is such a small part of the transatlantic market (at 3%) that it doesn't really change the market all that much. I view this as a positive in that BA tickets via Aer Lingus will become cheaper due to no double marginalisation and will allow for BAEC benefits to be applied which is not guaranteed if you book the flight separately.