oneworld to extend scope within member airlines to more key areas of activity

05 June 2002

Hong Kong: oneworld™ - the global alliance comprising Aer Lingus, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia, LanChile and Qantas - is to extend the scope of its activities into more key areas of its member airlines' businesses as they aim to build significantly on the US$1 billion of benefits they will generate this year from their existing oneworld links.

oneworld has focused on passenger activities, like most alliances, since it was launched three years ago. Now the Chief Executives of the eight member airlines, meeting yesterday in Hong Kong for their latest oneworld Governing Board, have established five top-level groups to develop co-operation in other areas:

  • Cargo, where the eight member airlines generate combined revenues of around US$4 billion a year. The heads of each carrier's cargo function will work together to explore potential benefits of working more closely together in areas such as outsourced services, ground handling and IT systems.
  • Engineering and Maintenance, representing some US$5 billion of costs for the alliance's members. Significant benefits have already been achieved through joint purchasing and sharing inventory. Now divisional heads from the eight oneworld carriers are exploring further co-operation, particularly by developing more common specifications across the member airlines and through greater use of common stock and shared third-party suppliers. They will also investigate the potential for developing more operational synergies.
  • Insurance, where senior managers will investigate the benefits of seeking joint insurance policies covering aircraft and all other issues, at a time when some premiums have rocketed tenfold since 11 September.
  • Flight Operations training, where departmental heads will consider the merits of jointly purchasing or sharing items such as flight simulators and other training devices and developing jointly training modules and procedures.
  • Revenue accounting, with greater co-operation in areas such as paperless billing, archive and retrieval functions and e-ticket processing among the key items for consideration.

    Opportunities will also be sought to share best practice in all six areas – which together account for some US$10 billion a year across all eight oneworld airlines.

    The establishment of these new top-level groups follows a commitment in February from the Chief Executives of the member carriers to quicken the deepening of working relationships between the partners, delivering more benefits for customers and adding more value for shareholders.

    oneworld is entering its fourth year adding more value than ever before to its members. Its eight airlines expect to benefit by almost US$1 billion this year from the various relationships between them in established areas of activity alone - through revenue generation, protection and feed, and savings from joint purchasing and shared airport and city facilities.

    Peter Buecking, the alliance's Managing Partner, said: "Our member airlines recognise that there are substantial benefits to be gained from working more closely together not just in our traditional passenger business activities but across the whole range of airline functions."