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The major airline alliances — StarAlliance, oneworld, and SkyTeam — may be in for some competition. JetBlue is linking up with Ireland’s AerLingus to create what may be the blueprint of an international discount alliance.

It’s too early to declare this a “real deal” yet, but in a few years, it might be a contender. Aer Lingus is already quitting the oneworld alliance on March 31, 2007, following its decision to be more like a discount carrier. Unlike its Irish brethren, Ryanair, Aer Lingus still flies widebody planes long-haul and has a business class cabin, so it’s not quite a discount carrier. It’s in that same intermediate space as US Airways, calling itself a low cost carrier, but still featuring legacy carrier networks and services.

Much like Aer Lingus isn’t quite a discount carrier, the proposed alliance is half-baked at this point. There isn’t even any codesharing on deck. Rather, by the end of summer 2007, each airline’s website will feature a “button” to the other’s website. Whoo.

A global discount alliance might work, and other discounters are toying with alliances already. AirTran and Frontier have an agreement allowing cross-selling and mileage-earning. Southwest and ATA have a similar deal.

Alliances are a mixed bag: On the one hand, they offer you a broader range of destinations to book on a single ticket, ostensibly with point-earnings, mutually-recognized status, and a global network of lounges, etc. to boot. But they’re never as smoothly integrated as the marketers claim. (For some more discussion of the downsides of alliances, see here. For some more color on the pros and cons of codeshares more generally, see here.)

In a “traditional alliance,” in which two ostensible competitors work together to sell each other’s flights, there’s a risk that consumers lose. For example, Lufthansa and United both fly Washington to Frankfurt, but since they cross-sell each other’s flights as codeshares, they don’t really compete. The companies are given a license to collude on pricing. It’s a fair assumption that fares creep up when codeshares crop up on the same routes.

But a jetBlue-Aer Lingus alliance may be different in this regard. JetBlue doesn’t fly to Dublin, and AerLingus doesn’t fly within the United States. No overlapping networks, so no collusion is possible. Win-win, for airlines and consumers? We’ll see.

What they need is a good name. BlueLingus?

Related:
- The shortcomings of airline alliances, and Star Alliance in particular

European ultra-discount airline Ryanair, famous for low fares, but also for a complete lack of amenities (no windowshades, tight seating, ads everywhere, pay for checked bags, mandatory fees galore…) is targeting the long-haul market and seeking a monopoly position in Ireland.

Ryanair announced an all-cash 2.80 euros/share takeover bid for AerLingus, which itself just went public. Ryanair has already acquired a 16% stake in their competitor.

If the deal were to go through, then the newly merged Ryanair would no longer be “contained” in Europe. They’d be global.

People talk about a race to the bottom in the airline sector. Make no mistake: Ryanair IS that bottom. It’s the self-proclaimed WalMart of the sky, and it could be coming to long-distance travel. Be afraid.

But the Irish government may throw a wrench into this. They have announced that they’re holding on to their 28.3% stake in AerLingus, and that they prefer to promote competition over consolidation. Stay tuned.

Related:
- Ryanair’s trifecta of customer alienation
- Wheelchair fees and airplane insurance: unpacking airfare surcharges
- Disturbing Ryanair safety/training video exposé

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AerLingus gets it.

It’s a small gesture that goes a long way: For the last week, the Irish airline has been putting a half-liter bottle of water at every seat on flights from the U.S. And now they’re tooting their own horn about it.

I think this is great. (Unsurprisingly, since water at every seat was my first suggestion/prediction here, and I ranted against insufficient beverage service here. Glad to see someone stepped up.)

Yes, in the grand scheme of things, security is still more inconvenient than effective — go read this piece by Bruce Schneier, “Refuse to be Terrorized” — but anything that even slightly reduces the irritation of air travel is okay in my book.

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tags: travel | Aer Lingus | airport security | water

– The European Court of Justice, the EU’s highest court, ruled illegal a 2004 agreement that required European airlines to send personal information about US-bound passengers to the United States government. The information has been sent to the US within 15 minutes of departure, allowing Washington to run the information against its no-fly lists and other databases. The court ruled that this was a violation of privacy. However, the policy remains in place for now, but may face changes by September 30. Obviously something will have to be done, or else traffic from Europe to the U.S. could be grounded.

– The United States Air Traffic Stabilization Board’s loan guarantees to several struggling airlines after 9/11 most likely extended the life of companies that would have otherwise gone under. But at least the government didn’t lose money on the $1.6 billion venture. In fact, it made a $312 million profit. (Whether the longer-term systemic effects of the loan program work out positively or negatively for the companies, the economy, and the government’s tax receipts is an issue for economists to figure out.)

– Irish carrier Aer Lingus will leave the OneWorld alliance, dominated by British Airways and American Airlines. The airline cites a shift from the hub-and-spoke model (that favors alliances and feed from other carriers) to a point-to-point model.

– Looking to advertise to a high-income readership? Look to in-flight magazines. The average household income for United’s Hemispheres magazine readers ($119,588) exceeds the income for financial weekly Barron’s ($110,562) and The Economist ($107,024), making it the magazine with the wealthiest readership in America. In fact, five of the top ten magazines in America, measured by household income, are in-flight magazines. Even Southwest’s magazine makes the top ten, despite its budget-travel reputation. Curiously missing from the top ten are Continental and USAirways.

– High class shouldn’t mean high price (translate that into Latin and it’s a contender for my family crest). But not everyone feels the same. Niels Pedersen of Supranational Hotels argues that Europe’s posh resorts should keep their prices high this summer, and not give in to the temptation to offer last-minute discounts, in order to avoid “the wrong sort of people.” I’m not making this up. This is solid platinum snobbery at its best, worth quoting at length:

“Once superior hotels reduce their standard tariffs below 30% — and many cut them to 50% in a panic bid to fill their rooms — the clientele they attract via web portals can do harm to the image of the property,” he said. “It’s about a person’s inner values of self-esteem and self-confidence. The key test for the wealthy is whether their children will meet the right kind of people.”

Wow. I hope that no one’s inner values have been hurt by my rampant use of Priceline.

– Finally, here’s a solution to the scourge of discount luxury hotel stays. Maybe those wealthy folks will keep their eyes off the riff-raff with an exciting game of… Segway Polo!