03 May 2006 - Recent comments by executives at generally isolationist U.S. airlines suggest those carriers may broaden their horizons and become relevant to more international travelers. Either through technology advancements, non-traditional partnerships or their own growth beyond North America, few-frills operators soon could find themselves competing against--or possibly cooperating with--full-service airlines for cross-border business.
Southwest Airlines, for example, recently indicated it may consider international operations, though not as a top priority. "There is no structural reason why we can't branch off from our domestic route system and fly internationally," said CEO Gary Kelly last month. "At some point, we'll be ready to do that."
While other strictly North American carriers also may consider flying international routes with their own equipment, some prognosticators are citing partnerships as a more likely approach--especially if U.S. legacy carriers continue to de-emphasize domestic growth in favor of more overseas services.
Currently, major U.S. airlines receive feed to their gateway hubs from their own domestic mainline services, wholly-owned regional subsidiaries and other network affiliates, but growth at independent carriers is prompting questions about whether major carriers should consider new kinds of arrangements.
"We are almost to the point where AirTran, Frontier and JetBlue will start to have marketing agreements to feed global carriers," suggested Cheapseats.com airline expert Terry Trippler.
Interlining costs, logistics issues and customer service challenges are impediments to such agreements, especially those structured as traditional code shares. Perhaps more to the point, major U.S. carriers may not be ready to reverse their strategies and cooperate with rivals.
Even so, statements by executives at independent U.S. carriers reflect growing interest in their services becoming more applicable to more travelers.
"We get a tremendous number of customers today that are finding their way to JetBlue from all points of the world, from all sorts of carriers coming into [New York] JFK," said JetBlue senior vice president of sales and marketing Tim Claydon at the Res-Expo conference in March. "I don't necessarily feel that, going forward, there will be quite so much value in traditional code sharing/interlining arrangements as there will be a greater level of visibility and use of technology to bring various airline schedules together."
Speaking at the same meeting, AirTran Airways vice president of planning and sales Kevin Healy agreed. "Traditional code shares probably won't happen because they are extremely complex and hard to manage, [but] people using Internet technologies to build low-cost itineraries into a single transaction with dual processes is likely to happen."
Indeed, technology providers and travel agencies are working to integrate disparate content sources that enable business travelers to consider more multi-carrier itinerary options. Though AirTran is a global distribution system participant, and therefore widely available to travel agencies and self-booking systems, Southwest and JetBlue, respectively, have limited and no GDS presence. Instead, direct connections to certain corporate booking tools and other agency workarounds have been developed.
In Europe, Copenhagen-based Sterling Airlines recently became the first user of a new Amadeus service allowing "ticketless" airlines to list fares and flight information in the global distribution system alongside "full service" carriers. The service does not allow agents to book seats, but seeing such options ostensibly facilitates the creation of non-traditional connections.
Beyond third-party technological and human integration, some suggest unorthodox airline partnerships are in the offing.
"My CEO [Fred Reid] made a reference in the fourth-quarter call to interlining ... my phone didn't stop ringing for three days," said Brian Clark, vice president of planning and sales for embryonic Virgin America. "Some of the people ringing me are in 'tight' alliances today."
The idea of one-off transoceanic feeder partnerships is not unprecedented, even in the age of global airline alliances. Southwest and Icelandair in the 1990s initiated a short-lived code-share deal through Baltimore Washington International, America West Airlines had a long-standing pact with British Airways before AWA merged with US Airways and some U.S. carriers maintain ties to European rail companies and other unaligned airlines.
Though global alliance participants in the United States and Europe remain dominant, they are not the only game across the Atlantic. A number of start-up all-premium transatlantic carriers, for example, may be natural candidates for marketing pacts.
Meanwhile, whether or not it launches it own cross-border service, Southwest by the end of the decade could appear on the radar screen of non-U.S. travelers. It already carries more domestic passengers than any other U.S. airline.
"At some point, we'll be connecting international passengers with [codeshare partner] ATA Airlines," said Kelly. "The effort right now, primarily, is to enhance our reservations system so that it can handle international itineraries, which includes things like taxes, currencies, etc. That will be up and running no later than early 2009."
ATA currently does not fly from the United States beyond Mexico, but in the past has said it would explore such possibilities.
