Questions and Answers

im curious to know your thoughts on this topic I’ve been thinking about. IAG is now forming Level the new budget carrier, why does IAG keep their airlines with One World Alliance? With them currently having now 5 airlines couldn’t they technically form their own alliance? They even own Avios, so why stay, especially when you think about value of reward currency between airlines? BA currently has 200 destinations, Iberia has 110, Aer Lingus over 80, then vueling with low cost flights around Europe and now Level starting low cost long haul. BA has 73 planes on order, including 35 A320/321, 18 A350, 20 787/7/9/10, I realise the A350 & B787 will most likely replace some of BA’s 37 747’s, Iberia orders with 27 A320/321neo, 3 A330 and 16 A350, replacing the A340’s, then Vueling with 50 A320/321 orders, than Aer Lingus with and additional 11 A330/A350 on order, but partner a lot of their flights on BA. Why should they stay with one world? Why not form their own alliance? They’re only getting bigger.

Just curious what you might think?

Thanks Brendan

Well, the base of IAGs operations are essentially LHR, MAD, BCN and DUB. That’s all very Europe concentrated. An alliance with just these four airlines wont be strategic. The idea behind alliances is that airlines with different hubs work together to get passengers from point A to B more efficiently.

For example. AA and BA, both in oneworld, work together. If a traveler wanted to fly between London and Cincinnati, they would need to connect since it’s not served by any of IAGs airlines. The partnership with American then comes into play. BA can essentially issue a single ticket for LHR-DFW-CVG with that last leg being on American. Otherwise they’d be stuck in Dallas. In another example, BA doesnt serve that many destinations in Mainland China. But their oneworld partner Cathay does. BA can fly passengers to Hong Kong and connect to Cathay Pacific or Cathay Dragon to get them to their final destination. This makes more sense than having IAG serve many more destinations directly.