Taiwan’s Starlux Airlines is a fast growing airline that was founded just before the pandemic. The airline now has A321neos, A330-900neos, and A350-900s, and is quickly expanding. In terms of service to the United States, the airline flies to Los Angeles (LAX), San Francisco (SFO), and Seattle (SEA), with plans to add even more routes.
One of the challenges that Starlux has faced is its lack of airline partners, limiting the carrier’s reach beyond its own route network. The airline does have a partnership with Alaska Airlines, but that’s about it.
A few months ago, Starlux’s CEO stated that the airline would apply to join the oneworld alliance. We now have more details about what this could look like, as a timeline for this has been provided. Whether or not the airline is accepted to the alliance remains to be seen, though.
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Why it makes sense for Starlux Airlines to join oneworld
Focus Taiwan is reporting that Starlux CEO Chai Chien-hua has this week reiterated plans for the airline to join the oneworld alliance, with the intent being for this to happen before the end of 2025. It sounds like the goal is for Starlux to apply to join oneworld before the end of 2025, rather than the airline (potentially) joining the alliance by then.
The oneworld alliance is the natural hit for Starlux, given the competitive landscape in Taiwan — China Airlines belongs to SkyTeam, and EVA Air belongs to Star Alliance. There’s no way either of those alliances would have two airlines from Taiwan, so it makes sense that Taiwan’s third full service airline would join the third alliance.
For the most part, the global alliances have lost a bit of steam in the past decade, as we’ve seen fewer airlines added than when alliances were still a newer concept. Airlines have largely instead focused on joint ventures and other kinds of partnerships.
But still, when you look at the overall competitive landscape, it sure seems logical for Starlux to join oneworld.
The problem with Starlux Airlines joining oneworld
We now know that Starlux Airlines intends to apply to join the oneworld alliance. I’m sure the oneworld alliance would love for Starlux to join. After all, the alliance makes money from member airline fees, so the more members, the more money. There’s only one major issue — veto rights.
The oneworld alliance has four founding airlines that are still in business, including American Airlines, British Airways, Cathay Pacific, and Qantas. One of the perks of being a founding member of the alliance is that you get veto rights on new members joining.
As you can imagine, this can create a conflict of interest — it could be in the best interest of the alliance at large for a new member to join, while an individual founding member might not view it that way.
It seems likely to me that Cathay Pacific would veto Starlux joining the alliance:
- Taiwan and Hong Kong are very close to one another geographically, and the airlines potentially compete in quite a few markets
- Keep in mind that American Airlines invested in China Southern, and China Southern left SkyTeam, but the airline hasn’t joined oneworld; I suspect that’s for the same reason, which is that Cathay Pacific didn’t want the airline to join, given how close Guangzhou is to Hong Kong
Really the alliance veto rights that founding airlines have is probably the biggest thing standing in the way of alliances growing. For example, Alaska joined the oneworld alliance a few years back, and that was only possible because of American’s support, as the two airlines launched a close partnership.
Who knows, maybe a compromise can be worked out here. After all, a lot of airline partnerships are looking a bit different after the pandemic than they would have several years back. Or if alliance membership isn’t possible, maybe we’ll increasingly see Starlux introduce more reciprocal agreements.
The oneworld alliance has plans to grow in the near future, as both Fiji Airways and Oman Air are expected to join the alliance in the coming months.
Bottom line
Starlux Airlines would be a logical fit for the oneworld alliance, given that the carrier’s two competitors in Taiwan belong to SkyTeam and Star Alliance. The company’s management has expressed plans to apply for alliance membership before the end of 2025.
While I’d love for this to happen, there’s one major thing standing in the way. Cathay Pacific is a founding member of oneworld, and has veto rights on any new members. Airlines tend to want to prevent competitors from joining their alliance. So just as Cathay Pacific didn’t want China Southern to join oneworld, I imagine the airline will have similar feelings about Starlux joining.
Who knows, maybe Cathay Pacific’s thinking has evolved post-pandemic. After all, the world has changed quite a bit, and we’ve seen some things that seemed inconceivable five years ago.
What do you make of the prospect of Starlux joining oneworld?
Cathay's clout may not be what it used to. Hong Kong has plummeted as a major business and tourist destination thanks in large part to the CCP crackdown.
I want JX to be part of oneworld but I am extremely skeptical due to CX's veto rights.
As a total layman, I'd say CX should look at JX as a complementary partner, rather than a competitor, if there is a bid to join oneword, that is. JX seems to be sticking to a "boutique" airline concept for the time being. It's like David and Goliath size-wise. Furthermore, CX's recovery in flight capacity has been disappointingly slower than expected, vide early 2024 cancellations debacle.
One possible obstacle could be political. Behind-the-scenes Chinese...
As a total layman, I'd say CX should look at JX as a complementary partner, rather than a competitor, if there is a bid to join oneword, that is. JX seems to be sticking to a "boutique" airline concept for the time being. It's like David and Goliath size-wise. Furthermore, CX's recovery in flight capacity has been disappointingly slower than expected, vide early 2024 cancellations debacle.
One possible obstacle could be political. Behind-the-scenes Chinese masters could force CX to veto JX membership simply in order to scupper a Taiwanese company's chance to grow and prosper in an alliance
Semi unrelated: Do Taiwan or Hong Kong participate in Open Skies? I’m 99% sure HK doesn’t. I’m curious if Starlux would ever be added to the AA/JL JV (many years away) due to the political climate? JL quietly has JV’s with MH (Malaysia) & a new one with Garuda Indonesia, so I don’t see why they wouldn’t want one with Starlux?
I believe that Taiwan have open skies with both Japan and the US, and not with HK, although it is already the busiest route. I don't see why would AA/JL will add JX to its JV, a JV with AS maybe more possible? the two are close recently. JL also has historically worked with CI, but only on a code-share basis.
That is accurate. Taiwan does not have an open sky agreement with Hong Kong, but the flight quotas are more than enough. There are more than 100 flights a day between the two regions (counting all 3 airports in Taiwan that currently have scheduled flights to Hong Kong). According to statistics by the Taiwanese government, the passenger flights are on average only 60–70% full. So for all intents and purposes, the agreement between Taiwan and...
That is accurate. Taiwan does not have an open sky agreement with Hong Kong, but the flight quotas are more than enough. There are more than 100 flights a day between the two regions (counting all 3 airports in Taiwan that currently have scheduled flights to Hong Kong). According to statistics by the Taiwanese government, the passenger flights are on average only 60–70% full. So for all intents and purposes, the agreement between Taiwan and Hong Kong is a de facto open sky agreement.
For those more pedantic, the agreement allows 198 passenger flights per week from each jurisdiction (396 flights total without seat or aircraft limitation). Freight and cargo is limited to 3,000 metric tons per week. Currently, both the number of passenger flights and the quantity of cargo are well below that limit.
I'd be curious if people have thoughts on what could cause alliances to become more "in fashion" again
TPE is a CX focus city, a tradition that traced back to 1960s as an intermediate stop between HKG and Japan/Korea. As of today, CX still operates a handful of 5th freedom flights from TPE to NRT, NGO, KIX and ICN. It’s very hard to imagine CX not defying JX’s application.
Not to say JX’s focus on North American market is a potential threat to CX’s very profitable segment.
It sure seems that Oneworld takes a bit longer to induct airlines lately, given the two-year delay (and counting) between Oman Air announcing its intention to join — that was in June 2022 — and the actual joining. (I think, though, that that’s a result of Oman Air’s internal downsizing, and not the alliance’s procedures as such.) So I’m not that confident Starlux will be able to join Oneworld all that quickly, though I bet...
It sure seems that Oneworld takes a bit longer to induct airlines lately, given the two-year delay (and counting) between Oman Air announcing its intention to join — that was in June 2022 — and the actual joining. (I think, though, that that’s a result of Oman Air’s internal downsizing, and not the alliance’s procedures as such.) So I’m not that confident Starlux will be able to join Oneworld all that quickly, though I bet it will all work out in the end.
In contrast, Virgin Atlantic joined SkyTeam within five months flat of the announcement. Usually it seems to take a year to join, be it RAM and Alaska in Oneworld or SAS in SkyTeam — and, in a year’s time, ITA Airways in the Star Alliance.
I sure am looking forward to a second Sinophone airline in Oneworld: CX has been too powerful for too long, all while Star has enjoyed ANA, EVA, Asiana, SQ, TG all these years!
Don't forget .. you also still have a fairly decent network representation in the Asian sub-continent by Malaysian (MH) being a Oneworld member.
I think the major roadblock here is the CX continues to run multiple 5th freedom routes out of TPE. In fact, there even is a perception among Taiwanese locale that CX is a Taiwanese airline due to the similarities (Hong Kong is the only other place that uses traditional Chinese as their national language).
Only same alphabet (traditional not simplified), but it's Cantonese vs Mandarin, so not the same.
I was surprised too when I first realized the extent of CX's fifth freedom flights from TPE - which I think has its origins in the times when there could be no direct flights between Taiwan and PRC?
Separately, does Starlux need a sponsor to bless its oneworld bid? Who would that be?
I can't see JX managing to join OW without CX being the sponsor
CX is lacking in long haul planes still, I can see them using JX to help feed traffic and cut the TPE routes completely.
Written traditional Chinese is essentially the same across dialects be it Cantonese, Mandarin or others. The dialects differ when spoken but many native speakers can understand each other to some degree.
The written language, yes. The spoken Cantonese vs Mandarin, no. It is very unlikely they would understand each other unless they've been exposed to the other language somehow (movies, music, etc) elsewhere already.
So if AA could suck it up and allow in another member on it's home turf and Qatar could as well with Oman being so close, all for the betterment of the Alliance: Cathay should too. That being said, Beijing runs them now. Not the same old Cathay board, so we shall see. Maybe they will allow them in if OW also let's in China Southern? CP is not the same company/airline as it was at founding or even 5 years ago.
The largest owner at 45% of CX is still Swire, which is still British-led. CA has a 30% stake, and QR also has a 10% stake. CX is not Beijing controlled right now, unless CA is planning to do a full takeover as sometimes rumored.
"CX is not Beijing controlled right now, unless CA is planning to do a full takeover as sometimes rumored."
(BG doesn't know what he's talking about. He comments b/c he has a keyboard. CX is still a British company, as you note.)
Who cares who owns the stock when it comes to the Chinese Government. They obviously have an outsized role in the bigger decisions at the airline, more than the 1/3rd y'all both note on paper.
if they aren't Beijing controlled, they won't have published the letter supporting the 2019 law.
PRC may have opinions on this also - CX follow PRC's tune ever since the HKG demonstrations a few years ago
Struggling to see why you think Cathay will be such a big factor. Is there evidence that Cathay is particularly concerned about Starlux?
Star has Air China, Air India, ANA, Asiana (soon to go away), EVA, Singapore, Thai.... And Air China has a ~30% stake in Cathay.
Do you read? Or pay attention?
I feel like the ability to book partner awards has really fallen off in the Oneworld alliance over the last couple of years. I've booked many partner awards in the alliance over the years, but that's gotten harder as airlines hold award space for only their own members. I've had a hard time finding a use for AA miles on partner award. BA guarantees award space on every flight when the schedule opens, but even...
I feel like the ability to book partner awards has really fallen off in the Oneworld alliance over the last couple of years. I've booked many partner awards in the alliance over the years, but that's gotten harder as airlines hold award space for only their own members. I've had a hard time finding a use for AA miles on partner award. BA guarantees award space on every flight when the schedule opens, but even when I'm willing to pay the fees and surcharges to BA, the vast majority of those flights are only available using Avios. Cathay and JAL awards are rare. I also prefer to book when schedules open, because I have a family and can't do last-minute, but AA's schedule opens almost month after schedules for many others in the alliance, so I'm not willing to wait. Likewise, I rarely book Star Alliance partner awards. Not being able to book last-minute means I'll never fly LH business or first. Booking a Singapore is best through Singapore, same with EVA, etc. Same with Air France/KLM in SkyTeam.
Ben,
You rock! Question for you that is entirely unrelated to the article: I'm trying to move rewards between a CapitalOne Savor and Venture cards, but suddenly, C1 is telling me I don't have any eligible C1 accounts to move rewards between. I wanted to check to see if Capital One is suddenly nurfing the ability to transfer cash back into miles rewards? Thanks as always!
@ John Smith -- Just tried and noticed the same thing. Let me see what I can figure out, and I'll report back. I suspect this is an IT glitch, but can't say for sure... thanks for reading!
Veto rights.
When the big brother propaganda is all about democracy and equality but really employ an authoritarian and dictatorship methods exclusive to quid pro quo cronies that brainwashed public ignores or failed to realize.
what are you even talking about
Another typical Eskimo yappuccino but kinda right.
Just see it for yourself what those who claim themselves to be "democratic" actually do.
We found one brainwashed person and one who actually realize the big hypocrisy propaganda scam.
One can only wonder what Cathay Pacific (which you mentioned), JAL, and Malaysia will have to say about this...
I don't think JAL will be the major roadblock here. They don't rely nearly as much on connecting pax as Cathay does.
The only one airline who could stop it would the ONE with veto rights. The airlines vote as well, but the vote isn't as strong (like 15 members now) as the veto. READING as article and comprehending it is important before commenting.
@TravelinWilly: Just wondering, have you looked at the strong Chinese influence in the other two alliances? Air China and Shenzhen (plus Juneyao as an outside ‘Connecting’ partner) in Star, and China Eastern (plus its subsidiary Shanghai Airlines) and Xiamen in SkyTeam. Not to mention the Taiwanese airlines: EVA Air and China Airlines, respectively. And I think that’s only been possible because, to the best of my knowledge, Star and SkyTeam don’t have this veto concept...
@TravelinWilly: Just wondering, have you looked at the strong Chinese influence in the other two alliances? Air China and Shenzhen (plus Juneyao as an outside ‘Connecting’ partner) in Star, and China Eastern (plus its subsidiary Shanghai Airlines) and Xiamen in SkyTeam. Not to mention the Taiwanese airlines: EVA Air and China Airlines, respectively. And I think that’s only been possible because, to the best of my knowledge, Star and SkyTeam don’t have this veto concept that Oneworld has, and hence have been open to admitting multiple Chinese-speaking airlines.
I bet CX has been keeping out all other Sinophone airlines all these years — which is the reason China Southern will likely never join Oneworld, despite wanting to — but I’m pretty sure that CX will realise the value in JX and allow it to join. Looking forward to Starlux in OW!
"Star and SkyTeam don’t have this veto concept that Oneworld has"
SkyTeam does. But only Delta, AeroMexico, Korean Air, and Air France have it; and they've never really had much reason to use it.
About the closest would've been back when Delta was desperately trying to poach JAL from American, but Korean never seemed bothered by it. They themselves did not have a joint-venture with Delta at the time either, and it wasn't clear whether...
"Star and SkyTeam don’t have this veto concept that Oneworld has"
SkyTeam does. But only Delta, AeroMexico, Korean Air, and Air France have it; and they've never really had much reason to use it.
About the closest would've been back when Delta was desperately trying to poach JAL from American, but Korean never seemed bothered by it. They themselves did not have a joint-venture with Delta at the time either, and it wasn't clear whether JAL would've had any interest in joining SkyTeam, instead of just being a Delta joint-venture partner in its own right.
Skyteam and Oneworld has their founders with "veto power" when it comes applications, whereas Star Alliance reportedly requires all full members to agree to an application (i.e the founders and all other full members are the same and it only takes any one full member to veto a Star Alliance application).