Star Alliance Looks to Add Budget Units of Members as Partners

(Bloomberg) -- Star Alliance, the global partnership of airlines ranging from Singapore Airlines Ltd. to United Continental Holdings Inc., is looking to include low-cost units of its members as partners as more and more people flock to budget carriers lured by cheaper fares.

“Many of our members and many airlines around the world are moving a lot to lower-cost platforms,” Chief Executive Officer Jeffrey Goh said in an interview at the Singapore Airshow. “We want to find a way of recapturing these markets offering the benefits and privileges that they used to have and enjoy. We want to use this connecting partner model.”

Star Alliance’s move is a recognition that budget carriers have captured a significant chunk of global airline traffic with lower ticket prices and on-time flights. Low-cost airlines are doing much better than expected, and their next frontier would be low-cost, long-haul travel, Alexandre de Juniac, chief executive officer of International Air Transport Association, said earlier on Monday.

Star Alliance, which connects 1,300 airports with its 28 members isn’t looking to add any new airline at the moment, Goh said. It however provides the flexibility for its existing members to co-operate with others outside the alliance in markets outside its network, Goh said.

To contact the reporters on this story: Dong Lyu in Singapore at dlyu3@bloomberg.net, Anurag Kotoky in New Delhi at akotoky@bloomberg.net.

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan

©2018 Bloomberg L.P.