How Airline Alliances Get Put Together, Middle East Edition
If there's one area of the globe that has vexed airline alliances for years, it's the Middle East. That area has the fastest-growing airlines on Earth, but virtually none of them have shown any interest in joining an alliance. When Saudi Arabian Airlines announced it would join SkyTeam this week, you kind of got the impression the Saudi flag carrier probably wasn't the Delta alliance's first choice -- just its best available option.
The goal of any airline alliance is to have maximum coverage. Being able to get between any two cities on earth without stopping more than twice is the dream scenario, and some, like Star Alliance, are closer than others. But there are big gaps that still need to be filled.
The void in the Middle East
One is in the Middle East. While plenty of alliance carriers fly to the region from every continent, few airlines based in the area actually want to join up. Emirates, Etihad, and Qatar, the three fastest growing carriers in the region, have all shunned alliances. Instead of trying to grow a global network by working closely with other airlines, those three want to build their own global networks on their own.
The Middle East is in a strategic location that allows airlines to fly nonstop to virtually any desirable location on Earth. Combined with rapid economic growth in the area and proximity to India, that makes for a ton of potential air traffic flowing through the area. Emirates, Etihad, and Qatar all want to grab as much of that as they can without sharing beyond some limited partnerships.
Saudi Arabian, on the other hand, is a different kind of airline. When those other "new" Middle Eastern airlines came into being, Saudi Arabian was an old man. The airline was founded right after World War II, and operates more as an old world airline that hasn't had much of a focus on growth. That fit with the more insular nature of the kingdom itself.
Saudi Arabian floats to the top
But when airline alliances started knocking on doors, Saudi Arabian floated to the top as one of the best options in a region with few takers. For Saudi Arabian, this makes a lot of sense. It allows it to compete with the other rapidly-growing airlines by grafting on an instant global network. For SkyTeam, it's good news as well, because the alliance gets more of a presence in a region where there's plenty of money to be made these days.
The biggest problem, however, is that Saudi Arabian isn't known for service the way carriers like Emirates are. It has a mixed fleet with a decent but not great product, but that's hardly a great selling point. This isn't a problem for SkyTeam, an alliance that likes to do "Extreme Makeover: Airline Edition" by picking up losers like Garuda Indonesia and Aerolineas Argentinas to give them a shot at improving. That's actually what Saudi Arabian is planning to do as well.
Extreme Makeover: Saudi Airline Edition
It's no coincidence that the admission to the alliance was accompanied by a turnaround plan. The four year plan will "include modernization of [Saudi Arabian's] infrastructure, restructuring of its domestic and international network and implementing its fleet modernization plan through the purchase of the most advanced aircraft."
In other words, it's going to come up to a global standard. Whether Saudi Arabia itself can become the home of a major connecting hub rivaling Dubai is highly questionable. This isn't a country that likes to open itself up as much as Dubai has. But it can certainly serve as an important place in the SkyTeam Alliance.
Related:
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- Two Reasons Why Japan Air Lines Chose American and oneworld over Delta and SkyTeam
- How to Fix LAX By Bringing Alliance Partners Together