Face-to-Face: Mark Schwab

Face-to-Face: Mark Schwab

Travel Daily talks to the CEO of Star Alliance

Travel Daily talks to the CEO of Star Alliance

Travel Daily goes Face-to-Face with the chief executive officer of the Star Alliance, Mark Schwab…

Q)    Star Alliance recently re-established a presence in Brazil with Avianca Brasil. Are there any other “gaps” in your network that you would like to fill?

Our primary focus at the moment is on strengthening and deepening our existing network. The current Star Alliance route map is the strongest and most comprehensive network anyone has ever put together, and already stretches to over 1,300 airports globally. We are comfortable that our member airlines offer services to just about anywhere you might wish to go. Does this mean that we will not add any further airlines to our network? Absolutely not. We will continue to look selectively for expansion opportunities that would work well and complement the existing network.

Q)    Following Qatar Airways’ membership of oneworld, are you in discussions with any of the major Gulf carriers about membership (Emirates perhaps)?

Mark Schwab
Mark Schwab

The rapid growth of the Gulf-based carriers has brought an interesting twist to the aviation landscape. But so far we do not see how our member airlines would benefit from bringing a Gulf carrier into the fold. Our alliance is built on the premise that each of our member airlines contributes to the value of the alliance with its own strong home market – this is not the case with the Gulf carriers. And in fact, if you want to travel to the Gulf region, we have several member airlines which will be happy to take you there.

Q)    With the rise of low-cost and hybrid carriers, is Star Alliance considering welcoming any of these airlines as members? And what are the problems associated with this?

As with any business, we are constantly reviewing our own operating model in the light of the changing industry landscape. However, all of our current members are full-service airlines, meaning they all offer loyalty programmes and benefits, for example. As most low-cost carriers have avoided offering these kinds of services, there seems to be natural disparity between the way they are positioned and the Star Alliance proposition. Having said that, for a potential tie-up with one of these carriers, we would have to identify where a partnership could make sense for the customers as well as to the airlines on both sides.

Q)    You recently re-launched round-the-world premium economy fares; are you seeing a strong appetite for these products, and what future initiatives can the travel trade expect from Star Alliance?

The launch of round-the-world in premium economy drew considerable attention in the industry and in the media. The product plays well to the leisure traveller who is looking for greater comfort at an affordable price – particularly those in retirement, who have plenty of time to travel the world but are looking for a little extra comfort on long flights. And it contributes to the success of the Premium Economy offering which many of our carriers are adding to their portfolios.

And a look into the future: selling a Star Alliance connection to interested customers is a strong offer not just because of our large network. We are working on further enhancements to our Corporate Travel product and our Conventions and Meetings product. And behind the scenes we will be introducing a number of technology solutions which will make global travel even more hassle-free than it is today.

Q)    With the rise of bilateral codeshare and interline agreements, plus Etihad’s equity investment strategy, where do you see the future of traditional airline alliances like Star?

Codeshare and interline agreements are a fundamental part of our alliance business. In recent years, joint ventures have become an increasingly attractive proposition. What we see is that airlines tend to find their trusted JV partners within the alliance family – so in fact JVs are strengthening us rather than adding a distraction. Over 60% of all airline capacity globally is currently bound into one of the “traditional” alliances. I do not see this shifting significantly in the near future. For Star Alliance I can say that our focus of work has shifted from growing the global network to growing the value our partnership creates.  And with that objective in mind, we will have a good role to play for a long time to come.

Q)    Which areas of the world do you believe have the biggest potential for the future growth of the Star Alliance?

When I look at future growth I think primarily of the world’s fastest growing markets for aviation – China, Latin America, India, Africa etc. The alliance is well-positioned in all of these regions and poised to expand accordingly as these economies grow and demand for air travel increases.

Mark Elliott
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Mark Elliott
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