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Star Alliance pulls together

By Phil Boeyen, ShareChat Business News Editor

Monday 3rd December 2001

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Air New Zealand (NZSE: AIRVA) and other members of the Star Alliance network are circling the wagons in the face of the current troubled air travel market.

New Zealand's national carrier has joined the 15 other alliance members, including United, Singapore Airlines, Lufthansa and Air Canada, in a pledge to look at ways of working more closely together to cut costs and improve customer service.

Chief executives of all the members airlines have been meeting in Miami and say the alliance is even more important now than ever before.

"As much as Star Alliance has proven its value in good times, it is now demonstrating its value in current times of difficulty," says CEO Jaan Albrecht.

"By working together and leveraging the combined strengths of the alliance, the Start Alliance member airlines stand to gain collectively."

During the meeting in Miami the chief executives have endorsed several key initiatives aimed at quickly reducing costs and improving cashflow.

One initiative will be to evaluate ground handling currently contracted to third parties.

"Whenever it makes sense from a business standpoint such agreements will be terminated and replaced with one Star Alliance airline doing the ground handling on behalf of all other online members," the airlines say.

"The ground handling initiatives are not only aimed at estimated annual of US$70 million but also at improving customer relations and service by achieving better continuity."

The Star Alliance members will also look at decommissioning airport lounges where there is duplication by two or more partners and will increasingly leverage their combined purchasing power with suppliers to negotiate favourable contracts.

"Star Alliance is actively approaching airport operators and providers of air traffic control services around the world to secure their support by at least temporarily lowering the infrastructure charges being levied on the airlines at the time."

Air New Zealand recently reached agreement with Auckland International Airport (NZSE: AIA) over the size of landing charge increases, ending a dispute that was heading for the courts.

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