Trying to figure out how airlines determine fares is utterly futile, but that doesn’t necessarily dampen my curiosity. On a recent visit to the Star Alliance headquarters in Frankfurt, I sought insights into how the global group sets its popular round-the-world fares.
I always enjoy dropping by the alliance’s modest office — not only because it’s an easy walk from the airport terminal, but also because just about everything it does is unique and pioneering in the industry. With 27 member-carriers, one would think it’s a grand operation, so I was surprised that fewer than 80 people work there.
As regular readers of this column have no doubt noticed, I’m a fan of airline alliances. Skeptics often point out the potential negative impact on competition and fares, but government regulators have designed mechanisms to maintain fair practices. Obviously, airlines have formed groups like Star, Oneworld and SkyTeam to boost their business, but, as I’ve written before, what is good for a company doesn’t necessarily have to be bad for customers… MORE
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American carriers can relax — their freedom to fly anywhere in the European Union is no longer threatened by Washington’s refusal to allow foreign control of U.S. airlines. That was the biggest news from last week’s agreement to expand the 2007 U.S.-EU Open Skies accord.
When the deal was first negotiated, carriers from both sides of the Atlantic were permitted to fly between any two cities without the previous government restrictions. However, those rights could have been lost next year, unless European companies could own controlling shares in U.S. airlines. Although that hasn’t happened, the EU agreed on Thursday to extend Open Skies indefinitely.
“It’s a big win for us,” said John R. Byerly, the top U.S. negotiator and deputy assistant secretary of state for transportation affairs. “There was a cloud hanging over the stability in the trans-Atlantic market, and now it’s gone. It was not an easy agreement. It took us eight rounds, beginning in the late spring of 2008″…
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