• American Airlines (Oneworld Livery) Boeing 777-223(ER) N791AN (1)
    oneworld
    Business Type:
    Airline Alliance
    Date Founded:
    1999-02-01
    CEO:
    Rob Gurney
    Headquarters Location:
    New York, USA
    Airlines:
    Alaska Airlines, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Qantas, Qatar Airways, Royal Air Maroc, Royal Jordanian, SriLankan Airlines

On June 20th, Oman Air announced it will officially join the oneworld alliance in 2024. The announcement was made at the IATA's 78th Annual General Meeting that took place on June 19th-21th in Doha. However, which benefits will this membership bring to Oman Air?

Network expansion

Have you ever wondered why global airline alliances exist in the first place? To answer this question, it is useful to highlight that the core aspect of every airline's product offering is its network. Indeed, people fly because they need to go from point A to point B. The more destinations an airline offers, the greater the chance to increase traffic and, therefore, revenues.

Nonetheless, it may not come as a surprise that no airline can reach all possible destinations in the world, and that is exactly the first reason why airlines join global alliances. For instance, Oman Air currently serves 41 destinations in 4 regions, which do not include the Americas. However, two US-based carriers are members of the oneworld alliance, namely American Airlines and Alaska Airlines. Consequently, from 2024 onwards, even if not flying directly to the US, Oman Air will enhance its network by offering seamless flight connections to the USA. In 2019, Origin and Destination (O&G) traffic between the US and Oman generated revenues in the amount of approximately $70bn. The oneworld membership could help Oman Air better exploit this lucrative market.

The increased network coverage is made possible primarily through expanded codeshare agreements with the other alliance partners. Oman Air already code-shares with oneworld members Malaysia Airlines, Qatar Airways, Royal Jordanian, and SriLankan Airlines. However, by joining the alliance, the carrier will increase the number of code-share agreements, thus further improving global connectivity across the alliance's network.

GettyImages-1217233097
Oman Air will officially join oneworld in 2024. Photo: Getty Images

The relevance of the network expansion brought about by the oneworld membership was underlined by the alliance Governing Board Chairman, His Excellency Akbar Al Baker, who commented:

Passengers of Oman Air will be offered a seamless travel journey, connecting them to more than 900 destinations across 170 countries

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Boost revenues and lower costs

According to an analysis conducted by SkyTeam, joining an alliance implies the new entrant's revenues can increase by up to 5%. But how is this possible?

First and foremost, increased revenues are a direct consequence of the above-mentioned improved network coverage. Indeed, if an airline flies to more destinations, or relies on its alliance partners to do so, traffic will consequently increase. Furthermore, alliance members bring traffic to their partners' hubs, with a positive impact on the volume of passengers. For instance, according to the GDS Sabre, Garuda Indonesia connecting passengers at its hub in Jakarta increased by 67% in December 2015, the first year the airline was part of the SkyTeam global alliance, compared to the same month in 2014. As a consequence, revenues generated from connecting passengers increased by the same amount.

On the cost side, joining a global alliance has a positive impact on a carrier's profit and loss statement through the joint purchase of different kinds of air services, from ground handling to maintenance. Indeed, by bargaining air services contracts for a number or all of its members, alliances can achieve far better deals than the single airlines would ever be able to.

A Qatar Airways Airbus A350-1000 departing from LAX.
Photo: Vincenzo Pace | Simple Flying.

Improved customer service

Not only airlines, but passengers also benefit from flying with a carrier member of a global alliance. The first advantage for passengers is the harmonization of the member airlines' frequent flyer programs (FFPs). For instance, from 2024, members of Oman Air FFP, Sindbad, will be able to earn and redeem miles when flying with all oneworld member partners. Furthermore, elite frequent flyers will also be granted access to lounges when traveling when other oneworld partners. On the other hand, oneworld Emerald, oneworld Sapphire, and premium cabin customers will enjoy Oman Air lounges at Muscat, Salalah, and Bangkok.

A way out of the pandemic

In the aftermath of the most profound crisis the airline industry has ever had to face, airlines need solid partners to enact their recovery. Indeed, several airlines are now operating with smaller fleets compared to pre-Covid times; however, the demand is now recovering faster than airlines' capacity. Consequently, being able to rely on codeshare agreements framed in a strong and reliable alliance could definitely be a strategic move for an airline trying to find its way out of the pandemic. This point was also stressed by oneworld CEO, Rob Gurney, who stated:

As the global travel industry continues to recover from the pandemic, the significant growth of oneworld in recent years demonstrates how important alliances and partnerships will continue to be

Simple Flying reached out to Oman Air for further comment. We will update the article with any additional announcements from the airline.

Do you think Oman Air will benefit from joining the oneworld alliance? Let us know what you think in the comment section.