A reader received what I considered to be an amazing email today from the New American Airlines. I am a member of both US Airways Dividend Miles and American Aadvantage (Executive Platinum) and I didn’t receive it, but a non-elite did. Much of the alliance information is exactly what I would expect. We already knew from previous press releases that US Airways would exit the Star Alliance on March 30, 2014 and on March 31st, would become a full member of Oneworld. It also mentions that United will be ceasing their codeshare arrangements essentially immediately, but this also was not news.
What was surprising is the following:
When we exit Star Alliance on March 30, 2014, we will no longer offer codeshare flights for sale with Brussels Airlines, Lufthansa or SWISS. Any existing reservations are safe, but you will not earn Dividend Miles for flights on these carriers after March 30, 2014.
It seems really odd to me that United exited their relationship ahead of the rest of Star Alliance and basically decided that when US Airways defected, they did not have to honor their obligation to the rest of the alliance members, of which US Airways will still be a paying member. This is not unlike other recent adverse changes United has made to Star Alliance members, such as top tier elites with Aegean who no longer receive luggage and lounge privileges. Singapore award space is also now limited, and there is a separate award chart for United redemptions from Star Alliance airline redemptions. But what remains strange, is that carriers are segmented out on these exemptions. The airline is leaving Star Alliance and joining Oneworld, so why are only United and the Lufthansa brands specifically named?
We plan to continue relationships with the following airlines, so you can continue to earn and redeem Dividend Miles on these select partners even after we’ve exited Star Alliance: Aegean, Air China, Air New Zealand, Avianca, Ethiopian Airlines, Eva, Shenzhen Airlines, Singapore Airlines, South African Airways, TAM, TAP and Turkish Airways.
That’s amazing! Travelers (or buyers of miles) can earn and burn on both Oneworld and the rest of the Star Alliance. Yes, Lufthansa and United are a large portion of Star Alliance, but the thought of being able to mix these two alliances is really tempting. The network specifically to Asia and the south Pacific is unbeatable.
If you haven’t yet decided to buy Dividend miles during their 100% bonus offer for the next few days you are out of your mind… or soon expecting a child (una sherpista).
This also brings a unique perspective on two other items. The death of the alliance, and the strength of a loyalty program as an independent entity.
First, I think the death of the alliance was introduced by a number of different carriers. Etihad has been buying up bits of airlines everywhere, (Cranky covers this well) and Delta has been doing some of the same acquiring 49% of Virgin Atlantic, and a small portion of Brazilian carrier Gol. Delta treats them as an extension of their business and in fact, better than some Skyteam members. Etihad does the same for their partners though they are not part of an official alliance. Delta, however, was the first to start treating some alliance members differently than others. Some members continue to earn as if they were Delta flights, and others now do not earn status nor redeemable miles. It raises the question of what the purpose is of an alliance when some members are treated as second class by others. United then followed suit by declaring a separate award chart for Star Alliance members, aside from their own metal flights ( which both were massively hiked).
Then we find this really odd situation where US Airways maintains essentially dual alliance membership. You can earn, burn and hopefully continue to buy US Airways Dividend miles and use them on a majority of Star carriers including some excellent gems (Singapore, Turkish, Eva, Air New Zealand) and all of Oneworld. This is because the program is treated separately from the airline as its’ own business (much like Avios or Aeroplan), and they do a great job clearing out excess award inventory for those Star partners. While I think that this level of overlap will fade as interests begin to contrast further, if this was simply a case of disintegration of the alliance members you would see an all-or-nothing approach. That’s not what happened here. Some airline bed fellows have been strange and will continue to be counter to the trend. Alaskan Airlines partners with both Delta and American (though maybe not Delta for long), and several members of all the alliances as well as other non-alliance members like Hawaiian and Emirates. They have found this relationship to be profitable and beneficial, so there is hope that it could continue for a while longer.
Ultimately, however, I do not believe this will last. In fact, the window will likely be very short where this kind of cross-alliance utilization will be available. In theory, flexible bookers should find excellent availability as the number of possible carriers is sky high, so the time is now to buy US Dividend miles, and the time will be March 31st, 2014 to book a dream vacation.
What are your thoughts? Am I too optimistic?