Skyteam news

[Y C LEONG 1]

china airlines and garuda are all confirmed.. i suppose china eastern too.. but the airlines i mentioned above are still in talks..

[flee 5]

Some news from MH CEO:

 

Malaysian Airline System Bhd, the national carrier, is open to joining a global airline alliance and believes closer cooperation with SkyTeam members would be “beneficial,” Chief Executive Officer Tengku Azmil Zahruddin said in an email to Bloomberg today.

 

Members of the Skyteam aviation alliance include Delta Air Lines Inc. and Air France-KLM. “We are able to offer SkyTeam a major hub in Asia,” Tengku Azmil said. -- Bloomberg

[Tamizi Hj Tamby 1]

Hmm,let's just wait and see for the time being.

 

For this year,Skyteam had received 2 new members;which is TAROM Romanian Air Transport and Vietnam Airlines.

 

Got some error on my previous post; China Eastern & Shanghai Airlines is expected to join ST on mid-2011,not this Oct.Sorry for the errors.

[Josh T 0]

Some news from MH CEO:

 

Malaysian Airline System Bhd, the national carrier, is open to joining a global airline alliance and believes closer cooperation with SkyTeam members would be “beneficial,” Chief Executive Officer Tengku Azmil Zahruddin said in an email to Bloomberg today.

 

Members of the Skyteam aviation alliance include Delta Air Lines Inc. and Air France-KLM. “We are able to offer SkyTeam a major hub in Asia,” Tengku Azmil said. -- Bloomberg

I hope MH can join SkyTeam soon. They alrready have alliances and code-chare agreements with KLM, Alitalia and Delta. ST don't have a strong presence in SEA and MH will provide them with that. It simply makes the most sense.

[Mohd Azizul Ramli 2]

Some news from MH CEO:

 

Malaysian Airline System Bhd, the national carrier, is open to joining a global airline alliance and believes closer cooperation with SkyTeam members would be “beneficial,” Chief Executive Officer Tengku Azmil Zahruddin said in an email to Bloomberg today.

 

Members of the Skyteam aviation alliance include Delta Air Lines Inc. and Air France-KLM. “We are able to offer SkyTeam a major hub in Asia,” Tengku Azmil said. -- Bloomberg

Is MH finally made up their mind? Can we expect an announcement is imminent?

 

In a recent conference, Pillars of Aviation, MH's CEO gave a very interesting comments about the airline's intention of joining an alliance. The session was shared with TK and Oman Air too. All 3 airlines gave very different answers and perspective about joining an alliance.

 

CEO Court

One of the more interesting sessions of the day was CEO Court, where 5 airlines CEOs were asked a variety of candid questions.

 

Focus

Turkish Airlines – 3 types of Mkt – domestic, intl P2P, intl transit.

 

Malaysia Airlines – more point-to-point (P2P) or origin-destination, like Malaysia-UK. enough demand for 1 daily 747. But 2 flights a day – that means at least 50% connecting. P2P is most profitable in the 3 hour flying distance.

 

Oman Air - Focus on P2P traffic – the biggest strength. Especially to India and Pakistan. There’s also the Ramadhan period when yields are very high. After GulfAir pull out, Oman Air is now into mid/long-haul market. 3rd/4th freedom market. Won’t look at a market if in some time it can’t develop into a daily service. Won’t be like EK and EY, but will be a niche player in the market.

 

 

Alliances

How has Star Alliance helped Turkish Airlines?

 

Alliance has helped TK like never before, much more than Interline. The biggest help has been in terms of spreading the brand – can reach many new markets. You can have the best product in the world, but can’t sell any seats if the brand awareness is not there.

 

Malaysia Airlines: Alliances are good for the customer, it offers choices. Want to get in, but with a position of strength.

 

Oman Air: Heavy investment in product – joining an alliance will dilute the product distinction. First widebody broadband wifi in the world, LiveTV – all with OnAir. Leverage the partnerships with suppliers – when times are tough, you get very good prices. Competition from regional A380s: “We’re still the best way to get to Oman – tight focus on P2P markets”. “We do not need alliances” when you’re a small, niche carrier focusing on P2P. We’re not big on transit market. Putting your code on someone else’s product is a BIG risk in terms of brand dilution. “I will build my penetration in the markets I want to target”. Domestic growth will also be key – 2 to 6 destinations in the next couple of years – much like public service

 

 

How will MH win the battle with LCCs?

The Odd Couple – Malaysia Airlines and AirAsia/other LCCs. Live together in one market, supposedly for different markets. Implementing OpenSkies is ideal, but difficult to implement. MH needs to focus on types of aircraft, and P2P – high yielding. There are lots of opportunities following a Blue Ocean strategy. Go for different markets and not go for bloodbath – different markets, increase the pie for both.

 

 

Business opportunities for growth

TK: Focus on transit, in addition to P2P: TK – Timing is key, when it comes to finalizing strategies – 10Mn P2P,

TK: Last 3 years, 3X the pax, 4X the cargo (!!!), a lot of it thanks to the alliance and increased brand awareness

 

MH: Focus on codesharing – eg with OmanAir for domestic M’sia, MH+TK for eastern EU/Germany – hence pick and choose your partners. If EK flies 3X daily to KL, 60% of pax connect on to other cities on MH – so that helps too.

 

OmanAir – when you think of p’ships, think about 10-15 yrs, not 2-3 years. Plans must be in-sync.

MH wants to get into an alliance which gives the airline 'strengths'. Maybe Air France is not allowing that, since it has been proven by TK that joining Star Alliance has helped them tremendously (tripled their pax number and quadrupled their cargo loads). If it worked for TK, why can't the same be for MH? Star Alliance is far more crowded alliance (28 airlines member) than Skyteam (13 airlines member).

 

 

I hope MH can join SkyTeam soon. They alrready have alliances and code-chare agreements with KLM, Alitalia and Delta. ST don't have a strong presence in SEA and MH will provide them with that. It simply makes the most sense.

Not only that. MH has code share agreements with China Southern and Korean Air too (on top of very indepth past relationships beyond code share agrements with Northwest and Continental). Enrich is exactly mirroring Flying Blue's structure. MH is so ready for SkyTeam since 4 years ago.

 

Does anyone know what is the Blue Ocean strategy as mentioned by MH's CEO in the CEO Court session?

 

It's ok. I knew it already. Blue Ocean strategy illustrates the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a "Blue Ocean", than by competing head-to-head with other suppliers for known customers in an existing industry. And therefore joining an alliance is the only Blue Ocean way for MH. It's that or bloodbath with AK till eternity.

[Josh T 0]

I couldn't agree with you more there, MAR.

MH will give ST a chance to compete with SA, especially when SA have both SQ and TG in their fold. I wonder how OW will feel about their presence in SEA when MH do join ST.

[flee 5]

I think they want to join from a position of strength as they want to dictate terms of joining. This kind of thinking is flawed and was responsible for Proton's failure to have an alliance with Volkswagen. It seems that Malaysian GLCs keep thinking that they are God's gift to their partners.

 

If they had approached it from the point of win-win alliance, I am sure that they would have joined one long ago.

[Josh T 0]

I think they want to join from a position of strength as they want to dictate terms of joining. This kind of thinking is flawed and was responsible for Proton's failure to have an alliance with Volkswagen. It seems that Malaysian GLCs keep thinking that they are God's gift to their partners.

 

If they had approached it from the point of win-win alliance, I am sure that they would have joined one long ago.

Yes, they need to have the mindset that joining an alliance is about co-operation and it's of benefit to both parties rather than them being a "gift" to the alliance.

[KK Lee 5]

VN is a confirmed member and GA is expected to join ST. Is there room for MH?

 

Why can’t MH admit it has missed the boat?

 

[Josh T 0]

VN is a confirmed member and GA is expected to join ST. Is there room for MH?

 

Why can’t MH admit it has missed the boat?

 

Of course there's room for MH. MH has a much bigger network compared to both GA and VN.

[KK Lee 5]

Of course there's room for MH. MH has a much bigger network compared to both GA and VN.

 

Will VN and GA object MH to join? How supportive is AF/KLM to MH?

 

[Josh T 0]

Will VN and GA object MH to join? How supportive is AF/KLM to MH?

 

Will they even have a say? Anyway, I think AF are the main people resisting MH's entry into ST.

[KK Lee 5]

Will they even have a say? Anyway, I think AF are the main people resisting MH's entry into ST.

 

Then what is the chance for MH to join ST?

 

[Mohd Azizul Ramli 2]

Will they even have a say? Anyway, I think AF are the main people resisting MH's entry into ST.

VN is already a member of SkyTeam so they really have a say in a form of a vote on whether to allow MH to join the alliance or not. Should GA being appointed earlier than MH too, then GA will have the same advantage as well. And logically, to protect their interests, voting against MH's entry would the the obvious choice since MH is a far superior airline than both VN and GA.

[jani 0]

I think they want to join from a position of strength as they want to dictate terms of joining. This kind of thinking is flawed and was responsible for Proton's failure to have an alliance with Volkswagen. It seems that Malaysian GLCs keep thinking that they are God's gift to their partners.

 

If they had approached it from the point of win-win alliance, I am sure that they would have joined one long ago.

 

Why is it a flawed form of thinking? This situation is NOT like Proton because believe it or not, no matter what everyone says, MH is still one of the best airlines in the world.

 

Skyteam need MH just as much as MH needs them. So why should MH just bend over backwards? MH are in a good position to demand whatever they want as long as it is reasonable enough.

 

At the present moment VN and GA are nothing close to MH in terms of product, reputation and routes offered. If Skyteam think that they are not losing out if they choose to ignore MH then they are wrong. Don't forget that Oneworld also exists, and MH could easily start to go to that direction.

[Josh T 0]

Why is it a flawed form of thinking? This situation is NOT like Proton because believe it or not, no matter what everyone says, MH is still one of the best airlines in the world.

 

Skyteam need MH just as much as MH needs them. So why should MH just bend over backwards? MH are in a good position to demand whatever they want as long as it is reasonable enough.

 

At the present moment VN and GA are nothing close to MH in terms of product, reputation and routes offered. If Skyteam think that they are not losing out if they choose to ignore MH then they are wrong. Don't forget that Oneworld also exists, and MH could easily start to go to that direction.

Couldn't have said it better myself! It would suit me even better if MH joined OW but they're more suited to ST.

[KK Lee 5]

Why is it a flawed form of thinking? This situation is NOT like Proton because believe it or not, no matter what everyone says, MH is still one of the best airlines in the world.

 

Skyteam need MH just as much as MH needs them. So why should MH just bend over backwards? MH are in a good position to demand whatever they want as long as it is reasonable enough.

 

At the present moment VN and GA are nothing close to MH in terms of product, reputation and routes offered. If Skyteam think that they are not losing out if they choose to ignore MH then they are wrong. Don't forget that Oneworld also exists, and MH could easily start to go to that direction.

 

Believe MH has been knocking on ST’s door for a number of years, before VN is admitted to ST and yet VN is chosen over MH.

 

It was the attitude that MH is one of the best airline in the world, need not bend backward to meet partners interior standard and MH should joint at preferential terms that MH didn’t join any Alliance in the 90’s.

 

OW invited MH to be a founding members but was rejected by the then PM for OW is dominated by colonialists. Unless MH can build a cordial working relationship with BA, QF and CX, it is unlikely OW will negotiate with MH on terms of joining.

 

Couldn't have said it better myself! It would suit me even better if MH joined OW but they're more suited to ST.

 

Why MH bother or consider to join any alliance?

 

[suadrif 0]

Why couldn't MH follow EK footsteps?

[Cheng Long 0]

Why couldn't MH follow EK footsteps?

 

They wish they could.. But MH is not just backed by strong economy, so they thought they need to find a pack to belong to, to survive in the harsh world of aviation.

 

Anyway, I thought MH is playing a risky game. On one hand, they want to be in a "position of strength" and decide to wait until the situation favours them. It's understandable as it will give them the extra leverage on the negotiation table.

 

But on the other hand, how long can they afford to wait? Is their situation going to get any better sustainably? They are still making loses despite extensive cost cutting measures. Frontline services and products have been compromised. The thing is that they may never reach that "position of strength" and longer they wait the worse their situation becomes.

[jani 0]

Believe MH has been knocking on ST’s door for a number of years, before VN is admitted to ST and yet VN is chosen over MH.

 

It was the attitude that MH is one of the best airline in the world, need not bend backward to meet partners interior standard and MH should joint at preferential terms that MH didn’t join any Alliance in the 90’s.

 

OW invited MH to be a founding members but was rejected by the then PM for OW is dominated by colonialists. Unless MH can build a cordial working relationship with BA, QF and CX, it is unlikely OW will negotiate with MH on terms of joining.

 

 

 

Why MH bother or consider to join any alliance?

 

 

What you say is true, but what's in the past is in the past. The current MH management cannot change what kind of decision was made then.

 

You don't think MH want to be in an alliance now? Let's be realistic and not so ever pessimistic. We don't know what kind of crazy deal Skyteam are proposing to MH. If it is not worth it for MH to accept the terms, then they shouldn't accept the terms, it is as simple as that.

 

Say we were to argue from a Skyteam standpoint, can you not make the same argument and say "Man, why the hell aren't Skyteam offering MH a place?".

[dean hizudy 0]

To be honest,I really love to see MH to enter oneworld rather than skyteam.Oneworld consists of well-known legacy carriers such as American,BA,Qantas....Infact,there is still no south east asian airlines that enter oneworld.Would love to see MH to be the first.

Edited September 3, 2010 by dean hizudy

[KK Lee 5]

Say we were to argue from a Skyteam standpoint, can you not make the same argument and say "Man, why the hell aren't Skyteam offering MH a place?".

 

VN is a member in the region, growing and meeting ST obligations, and GA is likely to be the next member in the region, so three airlines in a region will be over crowded.

 

[BC Tam 2]

..... but what's in the past is in the past. The current MH management cannot change what kind of decision was made then.

That is what we would like to believe, but is the rest of the world as accomodating and/or understanding ?

[Josh T 0]

To be honest,I really love to see MH to enter oneworld rather than skyteam.Oneworld consists of well-known legacy carriers such as American,BA,Qantas....Infact,there is still no south east asian airlines that enter oneworld.Would love to see MH to be the first.

If MH ended up joining OW, I would simply wet myself from sheer excitement!

[jani 0]

VN is a member in the region, growing and meeting ST obligations, and GA is likely to be the next member in the region, so three airlines in a region will be over crowded.

 

 

True, but that is besides the point. People around the world continue to wonder why Skyteam have yet to invite MH and they went for airlines that are inferior to MH.