Star poised to boost presence in North Asian market with addition of EVA
Star Alliance is planning a key step forward in boosting its presence in the fast-growing North Asian aviation market by adding EVA Airways, Taiwan's second largest carrier. EVA will be mentored by Air China, which currently is the only Star member in greater China although Shenzhen Airlines is also now in the process of joining the alliance.
EVA's expected entry into Star follows the entry earlier this year of rival Taiwanese carrier China Airlines into SkyTeam, the largest alliance grouping in greater China and North Asia. Star is now striving to close the gap in North Asia between it and SkyTeam by adding multiple new members in greater China.
EVA executives early this year stated the carrier had submitted an application to join Star. EVA’s executive team, led by chairmen James Jeng, attended this week’s Star chief executive board meeting in Addis Ababa to further promote its application. Star’s existing members are understood to be in favour of EVA’s application and a formal announcement will be made in Taipei in the coming months. As the process of joining Star takes 18 to 24 months, EVA could formally join Star as early as 2013.
EVA Air already has codeshare relationships with five Star members: Air China, All Nippon Airways, Asiana, Continental (now part of United) and US Airways. It also codeshares with oneworld members American Airlines and Qantas and two non-aligned carriers: Bangkok Airways and Hainan Airlines.
Air China ready to sponsor EVA's entry into Star
Air China president Kong Dong told CAPA at this week's Star event in Ethiopia that Air China will be EVA's mentor if EVA joins Star. Mr Kong says Air China is supporting EVA’s application and already has “very good relations” with the Taiwanese carrier and its subsidiary Uni Airways. He says it is not yet decided if Uni, which operates several of the EVA group's cross-Straits flights between Taiwan and mainland China, would also join Star.
EVA’s fast-growing cross-Straits network is a major attraction to Star. EVA and Uni now account for about 20% of capacity between Taiwan and mainland China. The EVA group now serves about 25 destinations in the mainland, with its cross-Strait services a key aspect of its strategy.
See related article: Taiwan’s EVA banking on more cross-Straits flights
More members in greater China is one of three priorities in Star's recruitment drive
Recruitment of new members in greater China as well as Russia and India will be a top priority for Mark Schwab, who becomes the Star Alliance’s new CEO at the beginning of Jan-2012. Mr Schwab previously served as senior vice president alliances at United Airlines and also has held positions at US Airways, American Airlines and Pan American World Airways, with whom he started his career in the industry with in 1975.
Star’s chief executive board approved Mr Schwab as the new head of the alliance at this week's meeting in Ethiopia. Mr Schwab takes over for Jaan Albrecht, who has left Star after over 10 years to become the CEO of Austrian Airlines. Mr Albrecht had identified Russia and India as the last white spots in Star’s network and told CAPA earlier this week that the alliance would also benefit from additional members in China.
Mr Albrecht had previously said the most likely new members in mainland China would be other airlines owned by Air China. Shenzhen Airlines, which is expected to formally join Star in late 2012, is partially owned by Air China. Mr Dong told CAPA that in future it is possible that other Air China subsidiaries will also join Star although for now this is not scheduled.
See related article: Shenzhen Airlines to boost Star's presence in China
Additional members in China will help Star keep up with SkyTeam, which earlier this year became the leading alliance in the important China market following China Eastern and Shanghai Airlines formally joining SkyTeam. SkyTeam’s presence in China will further grow as Xiamen Airlines is also now in the process of joining the alliance.
SkyTeam to remain dominant alliance in China
Even if EVA joins Star, SkyTeam will remain the strongest airline in mainland China, with a 44% capacity share once Xiamen joins, up 6ppt from SkyTeam's current 38% share. With the future additions of Shenzhen and EVA, Star Airlines will also grow its capacity share of the mainland China market by 6ppt from 19% to 25%.
China total capacity (seats) share (%) by alliance: Dec-2011
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By joining Star, EVA Air will increase by over three-fold the grouping's share of total weekly seat capacity to/from/within in Taiwan from 7% to 23%. SkyTeam will remain the largest alliance in Taiwan, with a 32% stake of the market. Around 29% of total weekly seats in Taiwan will remain unaligned to a global grouping.
Taiwan total capacity (seats) share (%) by alliance: Dec-2011
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In the wider North Asia region, Star Alliance will increase its capacity share by 4ppt from 25% to 29%. SkyTeam will also grow its market share in North Asia by 4ppt, from 29% 33%. Oneworld will have a notably smaller 13% capacity share.
North East Asia total capacity (seats) share (%) by alliance: Dec-2011
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In the entire Asia Pacific market, unaligned carriers will continue to comprise a considerable portion of total capacity, at 45%. SkyTeam will see its capacity share in the region rise from 18% to 22%, with Star's share increasing from 19% to 22%.
Asia Pacific total capacity (seats) share (%) by alliance: Dec-2011
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APPENDIX
Global Alliances members: Dec-2011
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Alliance members |
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Delta Air Lines Kenya Airways |
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Pending Members |
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Kingfisher Airlines
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EVA Air (likely) |