Comments
Members of Star Alliance could be forgiven to think that the new CEO of the world’s largest airline network will help them face the unrelenting competition from Middle East airlines. Jeffrey Goh, who will take over as the CEO of Star Alliance from 2017, understands what competition means in the aviation industry.
He used to work in an aviation law firm and his doctorate was on regulating airline competition.
But Goh, who is the understudy to the outgoing CEO Mark Schwab, says that he will continue to toe the line of his predecessor and the alliance will remain what it was initially conceived for: a brand and project management company which coordinates the activities of the world’s “most experienced airline alliance.”
Much was expected at the meeting of the chief executives of the member airlines in Zurich on June 4. Many of the members have accused the Middle East airlines of unfair competition because they receive large government subsidies.
Large subsidies by the Middle East governments have allowed their carriers to offer premier service at fares which the other airlines can’t match. This has enraged the top bosses of several European and US airlines but they haven’t been able to do much.
Lufthansa has been at the forefront of a campaign to neutralise the growing power of the Gulf carriers. The growing influence of the Middle East carriers has resulted in Frankfurt, Lufthansa’s biggest hub, losing market share on routes between Europe and Asia.
Germany is also the home for the Alliance, which was formed in 1997 in Frankfurt. At present it has 28 airlines as its members, including Air India.
But both Schwab as well as Goh in an interview to BusinessLine said they wouldn’t want to turn Star Alliance into a lobbying group. “Our focus is more on connectivity and not as a lobbying group which can be best done by those who are qualified to do,” said Goh.
He added that the airlines in the eye of the storm don’t have much of a loyal base, while as an alliance it has a huge customer bank.
At the same time, it would worry Goh that some of theseMiddle East airlines are already picking up stake in European carriers. For example, Etihad was one of the first to foray into Europe by picking up 49 per cent stake in Alitalia.
Star Alliance should be concerned as fewer flights and closing down of operations in certain cities will reduce its base of passengers, and will result in a weaker set of airline partners.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.