Aer Lingus to support OneWorld crisis efforts

Aer Lingus will support efforts on Thursday to salvage the OneWorld alliance despite concerns about the group's viability writes Arthur Beesley

The heads of all the airlines in the alliance will meet in Santiago, Chile, to discuss the future of OneWorld following the collapse last week of a joint venture between its two largest members.

British Airways and American Airlines failed to secure anti-trust immunity in the US for "co-ordination" on pricing and flight scheduling. The US Department of Transportation wanted the airlines to cede landing slots at Heathrow Airport in London in return for such immunity. They refused.

Without such immunity, the airlines could be prosecuted under competition law for co-ordinating pricing and flight schedules.

Alliances offer smaller airlines such as Aer Lingus the opportunity to increase sales to transferring passengers by offering code-share arrangements to larger carriers. Such code-shares enable both airlines to treat connecting flights as one for administrative purposes. Members also generate savings in the procurement process and in airport services.

But greatest synergies for larger carriers lie in the co-ordination of pricing and schedules.

In isolation, the failure of the BA-American initiative does not jeopardise arrangements between the OneWorld members. Yet certain members are believed to have expressed anxiety about the group's prospects because the lead airlines in rival alliances are immune from anti-trust prosecution.

While senior Aer Lingus sources accepted its alliance was in a weaker position than rival groups such as the Star Alliance and SkyTeam, they said there was no immediate threat to OneWorld.

The matter would be raised, sources said, but the meeting on Thursday was a scheduled arrangement. The company's chief executive, Mr Willie Walsh, will attend the meeting.

A spokesman said: "Aer Lingus has benefited in very tangible ways from membership of the OneWorld alliance. We're committed to its future. From an Aer Lingus point of view, the recent decision of the US Department of Transportation is not detrimental."

Sources at the State-owned company accepted, however, that OneWorld's fate would be determined by its larger members such as BA and American Airlines.

They were most vulnerable to competition from rivals such as German carrier Lufthansa and United Airlines, its US partner in the Star alliance; and from Air France and Delta Airlines, the lead partners in SkyTeam.

While BA and American are committed to OneWorld, it is thought they fear that a defection to another alliance would start an exodus. Group members include the Asian carrier Cathay Pacific, Finnair of Finland, LanChile of Chile and Spain's Iberia.

In particular, Iberia has questioned the value of remaining in OneWorld.

The carrier, which is part-owned by BA and American, is seen as a desirable partner by the other alliances.

Executives at Iberia are said to be frustrated at the lack of progress with BA. Iberia said last week that it would do everything possible to ensure that One World continued, but would "not be afraid to change if that becomes necessary".