Rumor: American & Airberlin Discontinuing Codeshare Agreement

For a long time airberlin has been in a horrible financial situation, as they’ve sort of struggled with whether they want to be a low cost carrier or full service airline. The combination of the two just hasn’t worked well for them.

For several years Etihad has had a ~29% stake in airberlin, which has been part of their strategy of investing in foreign airlines. Unfortunately there seems to be no end in sight for airberlin’s losses, so Etihad has apparently been getting a bit antsy as well.

About a month ago it was formally announced that some big changes would be coming to airberlin. Specifically:

  • Airberlin would lease up to 40 planes to Lufthansa, helping airberlin control their losses, while helping Lufthansa build their Eurowings division; it might seem strange for Lufthansa to help their competitor, but they have a common goal, which is to keep EasyJet and Ryanair out of Germany as much as possible
  • Going forward, airberlin will be a network carrier focused on their hubs in Berlin and Dusseldorf, with a core fleet of 75 planes

Etihad-Arrivals-Lounge-Abu-Dhabi - 1

What does this mean for the future of partnerships?

There are a lot of strange new rumors going around about what this could mean for the future of major partnerships:

  • Airberlin is in oneworld, Etihad is only in their own Etihad Airways Partner alliance, and Alitalia (which Etihad also has a stake in) belongs to SkyTeam
  • There are rumors that Etihad may be considering a partnership with Lufthansa going forward, given the ways in which they’re cooperating
  • Perhaps airberlin and Lufthansa could further cooperate going forward as well, given their common enemy of EasyJet and Ryanair, which is really the biggest risk to both airlines’ regional business
  • Airberlin has always been an outsider in oneworld

To dig a bit deeper into that last point, while airberlin has been in oneworld for a few years, it doesn’t seem like they’ve fully integrated, in a sense. For example, they’re the only transatlantic oneworld airline to not belong to the oneworld transatlantic joint venture, which includes American, British Airways, Finnair, and Iberia.

I’m not sure if that’s because airberlin doesn’t want to be part of the joint venture, or if the other carriers don’t want airberlin being part of it. I suspect the latter is the case.

oneworld-transatlantic-joint-venture

American & airberlin discontinuing codeshare agreement?

Frequent Business Traveler reports that American and airberlin are apparently planning on discontinuing their codeshare agreement as of March 2017. This hasn’t yet been officially announced, but I’ve heard similar rumblings from others as well.

This would be a curious decision, given that oneworld is otherwise quite weak in Germany. You’d think that American and airberlin would be complementing one another, given airberlin’s route network in Germany and American’s route network in the US.

Assuming American and airberlin discontinue their codeshare agreement, I imagine there’s a lot more to this story, and that perhaps they’d leave oneworld altogether. Etihad has these investments in different carriers, but they haven’t done much to tie them together and have them work well together. Could airberlin possibly join SkyTeam? Could airberlin and Alitalia both leave their respective alliances and instead become better integrated “Etihad Airways Partner” airlines?

There’s one thing that’s for sure — the major global alliances aren’t nearly as important as they used to be, as airlines instead opt for closer joint ventures and partnerships that can be much more mutually beneficial.

airberlin-lounge-berlin-airport - 23

Bottom line

Assuming the reports are true of American and airberlin discontinuing their codeshare agreement, I imagine there’s more to the story than just that. Airberlin has always been an outsider in oneworld, though big picture I wonder what this could mean for their participation in oneworld.

What do you think the future of airberlin holds in terms of partnerships?

Comments

  1. I’ve had trouble finding availability through AA awards for airberln for the past several months. Last year it was easy.

  2. I’ve had trouble finding AA award availability period unless you want to red eye or take 15 legs. I’m starting to think sky pesos are better than no pesos.

  3. Benjamin:my husband Steve and I flew United Airlines to Dachau to visit the nice historical sites where the Naaazi Party killed people and made lampshades out of, oh God forbid, just did really horrible things. But we really liked the countryside of Germany and Prussia. We had a BALL. And I just want to say one thing, contrary to the rumors that our neighbor Janice Greeley has been floating around in her bid to unseat my husband and I from the Western Estates Homeowners Association, we have NEVER hung any Swastika symbol outside of our home. It was just the Buddhist peace symbol, or the Qi or whatever you call it. So, NO, Janice, we are just good Americans like everyone else, bit any support of that horrible man Hitler, although my husband perhaps could be a distant cousin of Ernst Rohm, but that’s just the military heritage of the Dooley clan.

  4. The fact that AA cant even make ORD-DUS work at all (it’s now permanently discontinued) despite the AB operation at DUS demonstrates that AB 1) isnt a good partner 2) doesnt deliver the same quality revenue that LH does and 3) doesnt have the network strength that LH does. AB might be Germany’s second largest airline, but it isnt strong in the heavy premium markets such as FRA and MUC. While DUS is a large city, its industries simply do NOT produce anywhere near the same volume of high yield traffic that FRA and MUC do. And that’s reflected in the service that the airport offers (mostly low fare carriers and high volume players specializing in leisure traffic (EY, EK) and Eurowwings). Will be interesting to see how ANA, CX and SQ do long term in DUS given that they are premium-heavy carriers. Meanwhile, Berlin, while an amazing place to visit, and a very large city, is also a poor city. It definitely does not produce the premium traffic that even DUS produces, let a lone MUC or FRA. In sum, yes, AB does offer connectivity to Germany and Eastern Europe, but at a level that really isn’t viable or premium enough for higher yield/ higher cost carriers. The carrier’s own dire financial situation and many many reorg plans should tell you all you need to know about the carrier’s own tenuous viability.

  5. EY could actually make a proper fourth global alliance, provided they ensure their members are not members of the other 3 alliances, and somehow manage to get VA as a member (I expect VA’s other shareholders, NZ and SQ are the reason they haven’t joined yet). At the moment it just seems like a sad group of hopeless airlines no-one really wants to fly. They’ll obviously need a new name – ‘Etihad Airways Partners’ is wordy and confusing and doesn’t sound like an alliance. ‘Etihad Worldwide’ or similar would be a better name. They’d probably need a US partner – Virgin America or JetBlue would seem to make sense.
    A bit off-topic but gosh I wish Oman Air would join Star Alliance. They would be such an amazing addition for middle-eastern connectivity and they have a fantastic reputation. I would happily see Egypt Air leave and take their place.

  6. @Ben Frankly, I dont think any of the Star Alliance members would want Oman air to join their alliance. As Lucky has pointed out, it’s an amazing product. I’d love to fly them. But it’s also DIRT CHEAP for that premium product. Lufthansa, Austrian, etc have absolutely ZERO INTEREST in supporting a carrier that they see as poaching their traffic and diluting their revenue on routes they use to make a lot more money on. That’ll never happen unless something similar to Qatar taking a huge stake in BA happens (which is why Qatar is in oneworld). I dont see Oman Air having the ability to do that anytime soon.
    Meanwhile, EY is in no financial shape to make a fourth alliance. And even when you ask EY they do not refer to their partners as an Alliance. it’s very confusing and my impression is that even people at EY have absolutely ZERO idea what to do with it.

  7. @Ben – “They’d probably need a US partner – Virgin America or JetBlue would seem to make sense.”

    Would have to be B6, since VX won’t exist in the not too distant future.

  8. @Anthony
    New Berlin airport, though nice, will do nothing to change the poor demographics and low yielding nature of traffic to/ from Berlin

  9. I have booked AB for travel to Germany in March 2017, specifically because of Advantage. What would normally happen to points of tickets already booked in the case that AB leaves Oneworld? Would those normally be honoured?

  10. I wouldn’t be surprised if AB leaves One World soon. AB is rebranding itself as a tourism airline and I don’t see One World having it. Here is what will happen:

    0) Air Berlin renames itself Ethihad Air.
    1) In a suprise move, Ethihad takes over AB.
    2) Ethihad joins One World
    3) Qatar leaves One World
    4) Qatar joins Star Alliance

  11. The decision of airberlin to concentrate on the main hubs DUS and TXL is the right. The industry around DUS are the biggest in Germany, companys like Thyssen Krupp, Metro, Eon, Evonik, Henkel, BASF and more are there. The people density in this area is the highest in germany, So I think this move is the best they could make. They just need more Long haul – that is my only complaints. There is no long haul to south america, canada and asia with airberlin.

    The service on board especially in the business is better than at Lufthansa (and the price is better too 🙂 ) i didnt test the new business on short or medium flights, but its the only airline who offers this service in germany. i tested airserbias business on shorthaul and liked it very much.

    So I hope that carrier will fly longer and become a little bigger on longhaul. maybe with bigger Aircraft than A330.

    I am consultant at an big auditing firm and travelling is 3/4.

Leave a Reply

Your email address will not be published. Required fields are marked *