Hey LOT Polish, you should really meet my friend oneworld…
In this post:
The global alliances aren’t what they once were
The first global alliance (Star Alliance) was formed in 1997, and for the first decade the concept was around, it was all the rage.
The Star Alliance was founded in 1997
However, at this point many would argue that the concept is outdated. Over the past few years the global alliances have shrunk, rather than grown.
Why? Because at the end of the day there’s only so much a group of loosely connected airlines can have in common. Airlines are instead focusing on strategic partnerships, like joint ventures, rather than alliances.
I think Delta is the perfect example of an airline that has more or less given up on alliances. Even though they’re a founding member of SkyTeam, they’ve put almost all of their effort into forming their own global network of airlines, through equity investments and joint ventures.
The oneworld alliance is the only one with any momentum
At the moment the oneworld alliance is really the only global alliance where anything is happening. I’m not suggesting they’re best, but rather that it’s the only alliance getting a couple of new members soon:
Royal Air Maroc is joining oneworld this spring
At the same time LATAM is leaving oneworld this spring, due to Delta’s investment.
There aren’t many situations out there where I think to myself “X should really join the Y alliance,” but there’s one major exception, and that point really was driven home for me yesterday (it’s something I’ve thought for a long time, and several readers brought it up, so I figure it’s time for a post) — LOT Polish and oneworld really should do some talking.
LOT Polish is a neglected Star Alliance airline
LOT Polish belongs to the Star Alliance, and heck, they even use Lufthansa Miles & More as their frequent flyer program. However, in just about every way they’re the neglected airline in the alliance:
- LOT Polish is excluded from the Star Alliance transatlantic joint venture, which includes Air Canada, Brussels Airlines, Lufthansa, SWISS, and United
- Lufthansa strongly dislikes LOT Polish, and after LOT Polish has invested in Condor, Lufthansa is cutting ties with Condor altogether
- In the past Lufthansa relied on LOT Polish to provide them a lot of feed for their long haul flights, though at this point Lufthansa flies to just about all major Polish airports from both Frankfurt and Munich
Lufthansa isn’t happy about LOT Polish taking over Condor
The point is, I’m not sure anyone is really benefiting from LOT Polish being in the Star Alliance anymore… especially LOT Polish. This is true more than ever before with LOT Polish taking over Condor.
Lufthansa seems borderline hostile towards them…
The oneworld alliance really needs LOT Polish (& Condor?)
In just about every way, LOT Polish would be a perfect fit for the oneworld alliance:
- The oneworld alliance lacks a partner in Eastern Europe, especially following Hungary’s Malev going out of business in 2012, and Germany’s airberlin going out of business in 2017
- American is increasingly offering service to Eastern Europe seasonally, and this could offer some great connectivity
- As of now oneworld has the UK and Spain covered with British Airways and Iberia, and Northern Europe covered with Finnair, but they’re lacking in Eastern Europe
- Often airlines can’t join alliances due to veto rights of member airlines, though this seems like one of the rare circumstances where I think there wouldn’t be objections
Like I said, I truly don’t think there are many airlines nowadays where an alliance switch seems like it could be hugely beneficial, though this is one exception.
LOT Polish sure would be a good fit for oneworld
Bottom line
I realize it’s highly unlikely that this will actually happen. Changing alliances is very complicated, and it’s even more complicated when you’re using another carrier’s frequent flyer program as your own. Add in the fact that alliances aren’t as significant as they used to be, and this is even less likely.
But I absolutely stand by saying that:
- LOT Polish has second tier status in Star Alliance, which I guess I can’t blame Lufthansa Group for; they’d rather route people on Austrian, Lufthansa, or SWISS
- This is complicated even further by LOT Polish buying Condor, since Lufthansa wants even less to do with them now, as they’ll have increased competition out of Germany
- The oneworld alliance would probably be thrilled to have an airline based in Eastern Europe (and with a German operation), since that’s a gap in their network otherwise
While I put the odds of this happening very low, it sure does seem logical…
What do you think?
I am a LOT Miles and More member. Totally worthless program, as miles quickly expire and there is little one can do with them. But I still do LOT nonstop to Warsaw from JFK two to three times a year....so much better that crawling around underground at Heathrow or changing umpteen terminals as CDG to get to Warsaw. United is not even in my vocabulary so connecting through Frankfurt or Munich ain't going to happen...
I am a LOT Miles and More member. Totally worthless program, as miles quickly expire and there is little one can do with them. But I still do LOT nonstop to Warsaw from JFK two to three times a year....so much better that crawling around underground at Heathrow or changing umpteen terminals as CDG to get to Warsaw. United is not even in my vocabulary so connecting through Frankfurt or Munich ain't going to happen for me. Too bad LOT is not part of the Delta/KLM Skymiles program, as Delta gave up serving Warsaw about 20 years ago.
BA and LO were partners and LO got an even worse deal then the current LH-LO alliance. BA treated LO as a low feeder airline, way worse than LH does now. Trust me, LH and UA aren't the kindest partners but they are way more generous than BA and AA. This is why LO broke its relationship with BA and willingly into LH and Miles and More. Be careful what you wish for.
LOT seem to be doing fine in *A regardless of being on transatlantic sidelines. I fly to Warsaw 4 to 5 times per year and it always boils down to going with one connection on LH or non stop on LOT. It is a tough choice as LH is cheaper and overall better quality in every class of service but there I s a huge convenience of going nonstop. LOT J is pushing $4K for round trip while LH can be had for half w connection.
I don't see it being realistic that LOT even thinks about leaving Star.
I don't think they are excluded from the TATL JV or under attack from LH, I think they just wouldn't derive great benefit from it at vice versa.
Besides, they have bigger problems. Within Poland, they are only really dominant in Warsaw; even in KRK they have mostly feeder service to WAW except for a less-than-daily flight to ORD. Ryanair and...
I don't see it being realistic that LOT even thinks about leaving Star.
I don't think they are excluded from the TATL JV or under attack from LH, I think they just wouldn't derive great benefit from it at vice versa.
Besides, they have bigger problems. Within Poland, they are only really dominant in Warsaw; even in KRK they have mostly feeder service to WAW except for a less-than-daily flight to ORD. Ryanair and Wizzair keep growing in Poland, and compared to them LOT is the "full service" option that has a FF program, status benefits, etc.
LH/OS/LX is an option to connect westward, but LH's growth into the Polish market is really more to do with LH absorbing Air Berlin's traffic than anything else. It's not like they are trying to steal much from LO.
For LOT to actually contemplate leaving Star right now means:
-forfeiting a large portion of their premium and regular flyers to LH group
-having to create a new FF program
-losing business that chooses to fly LO because they get Star benefits.
But then, if IAG went and bought LO, it would probably change the arithmetic quite a bit. But IAG seems to be a bit mercenary in their partnerships just the same.
1. You really should learn the meaning of the term Eastern Europe (and Central Europe preferebly)
2. Agreed LOT has more to win with OW than *A
3. Not so optimistic about AY having „nothing against” such move
Honestly, while LOT might be nice for short hauls, my worst long hauls were with them (WAW-ORD). There was nothing outrageous but just lazy service and bad food. United, Lufthansa or SAS were better even though they’re not great. Though, Hard liquor is cheap on LOT if that matters...
In a nutshell -- The reason Delta disdains airline alliances is they do not help fix prices and control capacity!
Here's to hoping that LOT, SAS, and TAP consider forming their own little "transatlantic joint venture" to counter that FIVE-WAY SA venture (especially since those three airlines are significantly cheaper and give arguably better service than any one member of said venture)...
The foreign policy of the Polish government may have a significant impact on the place and shape of LOT in the near future. At the same time, plans to build a new, large airport in Baranów will only exacerbate the conflict with LH. Alliance change is rather inevitable. The only question is when will this happen?
@GB: That was back in 2015. As evident, things have only gotten worse since then. As much as I like and really admire what Star is as an alliance; the sad reality is that it is not an easy place for any airline that is not a founding member. In my opinion, LO, TK, ET, OZ, BR and AV are the most under-appreciated members in Star, all for the same reason: they have the potential to grow; or have grown.
LOT had the opportunity to leave *A as recently as a few years ago without paying the penalty because *A was changing the way decision-making would happen within the alliance. That they did not makes it seem incredibly unlikely that they would consider doing that at all in the near future considering how expensive it is and how foolish it would look if they were to leave and pay the full fee after they had an opportunity to leave without forfeiting any fee.
LOT Polish looks set for a large expansion towards the end of the decade with the completion of the massive new Warsaw Airport (the design competition is underway right now) it's seems logical for LOT Polish to start quietly negotiating with oneworld as well as someone like IAG as they could potentially use Avios in order to avoid the pain of coming up with their own frequent flyer system. LOT Polish joining oneworld would properly...
LOT Polish looks set for a large expansion towards the end of the decade with the completion of the massive new Warsaw Airport (the design competition is underway right now) it's seems logical for LOT Polish to start quietly negotiating with oneworld as well as someone like IAG as they could potentially use Avios in order to avoid the pain of coming up with their own frequent flyer system. LOT Polish joining oneworld would properly out the squeeze on Lufthansa with the UK, Spain and a portion of the Nordic countries being controlled by oneworld airlines. BA might be interested in Norwegian again soon, this would hand them Scandinavia and apply huge amounts of pressure on the Lufthansa Group. In many ways when you look at the Lufthansa Group you can see them losing ground.
SAS is not in the transatlantic Joint Venture either
I somehow think star alliance has limited relevance for LOT minus Condor. They somehow seem squashed between Lufthansa affiliates and Turkish. LOT has a transit hub model and a very strategically located geographic hub in Warsaw. It also has a sizeable home market.
Condor on the other may be a bit more challenged without Lufthansa’s feed. Fortunately it has several low cost carriers to align with for short haul feed and should be able...
I somehow think star alliance has limited relevance for LOT minus Condor. They somehow seem squashed between Lufthansa affiliates and Turkish. LOT has a transit hub model and a very strategically located geographic hub in Warsaw. It also has a sizeable home market.
Condor on the other may be a bit more challenged without Lufthansa’s feed. Fortunately it has several low cost carriers to align with for short haul feed and should be able to find a solution.
I still however can’t rationalise why LOT invested into Condor? There are very limited synergies between Condor and LOT’s transit business model.
Given that airline alliances are increasingly become irrelevant I see limited value in LOT joining Oneworld. Given their dominant position in Eastern Europe including a secondary hub in Budapest, LOT will have no dearth of alliance opportunities and instead can choose to partner with carriers from any alliance that will bring it maximum value.
PS: what’s not to love in being an armchair CEO? ;-)
Finnair wouldn't be happy about that. Basically all of LOT's longhaul flights are direct competition to them, going after the same kind of connecting passengers.
I'm not sure Lufthansa are 'hostile' towards LOT.
What has happened over the last ten years is that LOT have pulled away from being a feeder of Lufthansa (which is what all European *A airlines that are not Lufthansa are meant to be in the Lufthansa grand plan for the domination of the skies) and started to act more independently.
Lufthansa have made their displeasure at that known but LOT have moved ahead...
I'm not sure Lufthansa are 'hostile' towards LOT.
What has happened over the last ten years is that LOT have pulled away from being a feeder of Lufthansa (which is what all European *A airlines that are not Lufthansa are meant to be in the Lufthansa grand plan for the domination of the skies) and started to act more independently.
Lufthansa have made their displeasure at that known but LOT have moved ahead anyway strengthening their position at their home base and other major places like KRK and they've also opened what appears to be an increasingly successful base at Budapest which had no full service carrier after the demise of Malev. They also have a much smaller operation in Vilnius.
There are good relationships with SAS and Turkish but both could be a lot stronger in terms of bookings - difficult to book through tickets online with any of the three onto a second carrier and they could easily be joined in that relationship by TAP and Aegean both of which function more independently and we may yet see Aegean take over Croatia which is purely a Lufthansa feeder. If that became an alliance within an alliance it would compete very effectively with the LH group in Europe and they certainly need some competition from within because Lufthansa never has been and I doubt ever will be cutting edge with the exception of the F terminal at FRA. They are currently equaling BA in the drive to the bottom.
The one thing that puts me off using LOT much more often out of my home base which is LHR is the possibility of the 7M8 being reintroduced. LOT are the only legacy European carrier to operate it and I'm never going to fly on it. It was operating almost all the LHR-WAW services before it was grounded and I fear it will be reintroduced should it be allowed to fly again.
Given that those they cooperate with use ever increasing fleets of A320neos if they would see the error of their ways and keep their NG 737s in operation until some neos could be delivered I think their future would be brighter.
Correction: "LOT Polish Airlines" or "LOT"
@Ricky: "I don’t get why people feel the need to say LOT Polish instead of just the correct and simpler “LOT”."
Because LOT is a word that is used a LOT to mean something that is a LOT different from "Polskie Linie Lotnicze LOT", so there is a LOT of need to clarify what you mean by saying, for instance, "LOT Polish" instead of just LOT.
(Sorry it was I who had to provide this...
@Ricky: "I don’t get why people feel the need to say LOT Polish instead of just the correct and simpler “LOT”."
Because LOT is a word that is used a LOT to mean something that is a LOT different from "Polskie Linie Lotnicze LOT", so there is a LOT of need to clarify what you mean by saying, for instance, "LOT Polish" instead of just LOT.
(Sorry it was I who had to provide this explanation. Someone else and I drew lots while standing around waiting for our lot of pencils to arrive. And I won that lotto.)
Lot consistently has decent business award availability to Europe and their late night flights make it easier to get right to sleep for the journey and mitigate jet lag. I use almost half my United miles on LOT flights.
@LOT Polish Airlines
Glad you clarified. I don't get why people feel the need to say LOT Polish instead of just the correct and simpler "LOT".
LOT could be a good fit for ONEWORLD. But they would have to come to an agreement with AA. LOT and AA are both adding flights from Poland and Hungary from the USA so that could be an issue. Once they get that resolved over interlining, code sharing, etc then it could work. AA has a JFK hub and ORD hub to support LOT. LOT could support AA's flights in Eastern Europe. With Lufthansa in...
LOT could be a good fit for ONEWORLD. But they would have to come to an agreement with AA. LOT and AA are both adding flights from Poland and Hungary from the USA so that could be an issue. Once they get that resolved over interlining, code sharing, etc then it could work. AA has a JFK hub and ORD hub to support LOT. LOT could support AA's flights in Eastern Europe. With Lufthansa in Star Alliance LOT isn't needed nor does it provide anything special. And with LOT buying Condor it just means that it's time for them to find another home. They can keep their connectivity agreements with SAS, Aegean & Tap while still being in ONEWORLD.
Ben, thank for this post. But we need some correction here. We know the English translation of our name is little bit confusing, but actually full name is LOT Polish Airlines and shorter version is just LOT not "LOT Polish". In contrast to another airlines and trends our name is made of 4 words - Polskie Linie Lotnicze LOT (and 3 in English - LOT Polish Airlines) just like KLM Royal Dutch Airlines. Could we kindly ask you to make a correction in your article?
@Andrew: How is it good for LOT if passengers choose to fly to all destinations with LH rather than on their own flights through WAW?
Yeah speaking on lot polish joining oneworld, I feel scandinavian is also a neglected star alliance airline as they are not included in the transatlantic joint venture. They also seem to be competing with the Lufthansa group airlines. Perhaps scandinavian should try out skyteam?
@Julian: My sympathies for your displeasure at seeing LOT lowering fares over the Atlantic. As a customer, I am all in for lower fares. If LH has a higher cost structure, it is their issue.
You just yourself said the gist of Ben’s deductions - LH group and Star don’t need them because their hub network is pretty redundant with the LH group. LH wants to route all their traffic through their hubs wheareas LO...
@Julian: My sympathies for your displeasure at seeing LOT lowering fares over the Atlantic. As a customer, I am all in for lower fares. If LH has a higher cost structure, it is their issue.
You just yourself said the gist of Ben’s deductions - LH group and Star don’t need them because their hub network is pretty redundant with the LH group. LH wants to route all their traffic through their hubs wheareas LO is trying to establish themselves as the primary carrier of Eastern Europe, which would bypass LH hubs. It has been widely reported that LH has been even blocking LO from codesharing with NH. Now, cutting feed to Condor has the potential of bankrupting it - you can fully thank LH for that.
On the other hand, oneworld is a case where their presence would be much appreciated and would provide an excellent platform for their growth. In the long run, LO needs to be in an environment that allows them to expand and grow sustainably. At least that is what I think Ben is trying to convey.
As a semi frequent visitor to Poland, this wouldn't work a bit. The Lufthansa connectivity provided to nearly all small towns in Poland is unrivaled with the global footprint of Lufthansa. LOT joining Oneworld would mean a majority of connections outside of Krakow, Warsaw and Gdansk would not be plausible to make with 1 connection.
I think LOT benefits far more from being a Star Alliance carrier, and despite their recent growth, would be going...
As a semi frequent visitor to Poland, this wouldn't work a bit. The Lufthansa connectivity provided to nearly all small towns in Poland is unrivaled with the global footprint of Lufthansa. LOT joining Oneworld would mean a majority of connections outside of Krakow, Warsaw and Gdansk would not be plausible to make with 1 connection.
I think LOT benefits far more from being a Star Alliance carrier, and despite their recent growth, would be going backwards from the progress they have made.
LOT is a second tier carrier so it gets second tier status in Star. Also if you look at how messed up their pricing and fares are, it’s no surprise they won’t be welcome to the revenue share. Also between Swiss, Austrian and Lufthansa the revenue share has E EU more than sufficiently covered so what does LOT actually bring to the table except for low yields and awful service?!
*with Etihad.
I think it would make far more sense if Air Serbia joined oneworld, especially in light of American’s relationship with zero had. Granted, American broke their codeshares, but they just restarted with Qatar, and I think it’s only a matter of time before they start up with Etihad again.
A lot of speculative writing here. I mentioned before you're great at reviewing but you're getting more and more into speculative talk on commercial subjects and I'm not sure you need to be. Having said that, I suppose it generates responses and clicks.
Being in a JV does not mean it will be guaranteed to be lucrative. If for example revenue % share is below ASK % share this can be an issue. If LOT...
A lot of speculative writing here. I mentioned before you're great at reviewing but you're getting more and more into speculative talk on commercial subjects and I'm not sure you need to be. Having said that, I suppose it generates responses and clicks.
Being in a JV does not mean it will be guaranteed to be lucrative. If for example revenue % share is below ASK % share this can be an issue. If LOT has lower yield than everyone else in the JV the benefits may not necessarily outweigh the standards and guidance that goes on in aligning with the other partners. Flexibility to start routes, drop routes, do sale activity etc. is all less straight forward when in a JV. There may even be minimum required ASK share to even be in and if they want to cancel a low performing route and it takes them below things can get complicated. Lots of factors going in.
Not sure where this sentiment comes from that LOT is somehow the unwanted stepchild in Star Alliance. Are there sources from LOT that claim this?
Also, it may be a great idea if AirSerbia joins one world
The hate runs deeper and older than you think.
Why did you think Poland was invaded first.
The Frankfurter and Wiener are going after the Polish hotdog using Bunzkrieg strategy. Adolf Pickler and Benito Mustardini forces were formidable until Winston K Chup-chill joined forces with Franklin D Relishvelt after the surprise invasion of Coney Harbor.
After the counter eattack by Joey Chestnut, General Kobayashi declare unconditional surrender and
an end to the...
The hate runs deeper and older than you think.
Why did you think Poland was invaded first.
The Frankfurter and Wiener are going after the Polish hotdog using Bunzkrieg strategy. Adolf Pickler and Benito Mustardini forces were formidable until Winston K Chup-chill joined forces with Franklin D Relishvelt after the surprise invasion of Coney Harbor.
After the counter eattack by Joey Chestnut, General Kobayashi declare unconditional surrender and
an end to the conflict.
And this doesn't include the saga of Douglas MacDonald's domination of Hamburg and his redhair ex-wife Wendy or his son Big Boy.
That is why LOT is treated this way.
While it’s difficult to switch alliance, the fact that they don’t even play the China Southern type of protest speaks something
LOT & SAS has good relationship for the baltics
You say LOT is excluded from the A++ Joint Venture. Do you have insights that they are not allowed to join? Evidence of this at all?
@ Julian -- I said they're "excluded" in the sense that they're not part of it. However, I'd be willing to bet they'd like to participate in it but haven't been allowed to. These joint ventures are extremely lucrative, and I don't see any universe in which this is LOT's choice, rather than Lufthansa Group not allowing them in.
No!! I rack up miles on short legs and connections out of Tallinn!! I can choose between LH, SAS, LOT, TL and A3. LOT actually was where I registered all my flights from Estonia’s “airline” Nordica as well. Trust me LOT is doing great in Star Alliance! ;)
As in I don't see how they can ever break away from LH's hold on them
Probably even less practical when all their frequent flyers are integrated into Miles&More...