IN FOCUS: Oneworld given Air Berlin lift

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Oneworld's active members swelled back to 11 after the entry into the alliance of Air Berlin gave it a new partner in the heart of Europe's largest market.

The German carrier's accession provided a welcome boost for the alliance after its recent loss of one European partner through the collapse of Hungary's Malev and it was forced to put hopes of gaining a foothold in India on ice as prospective member Kingfisher Airlines' financial woes mounted.

"Air Berlin delivers one of the most attractive networks serving this part of the world," says American Airlines chief executive Tom Horton of the Oneworld's latest member. "Until today Oneworld carriers fly to seven cities in Germany and three in Austria. Air Berlin and [its Austrian partner] Niki have more than tripled that. Travellers in this region now have a choice. That is what Air Berlin brings to Oneworld."

Air Berlin chief executive Hartmut Mehdorn says: "We don't do it just for Air Berlin, we do it for the customer." He highlights benefits to the customers through increased access to lounges, network and to earn miles with partner carriers. "So it makes a lot of sense for our customers."

British Airways acted as sponsor for Air Berlin's Oneworld membership and chief executive of its parent International Airlines Group, Willie Walsh, points to the impact of a new cloud computing-based Oneworld IT hub on speeding the process. "For us its been one of the easier sponsorship programmes," he says. The new Oneworld IT hub - which initially focuses on linking each members frequent flyer IT systems using cloud technology- reduces the time, cost and complexity of new members linking their IT systems with their new partners. "Air Berlin is the first airline to take advantage of this new hub," Walsh says.

Alliance membership completes a journey which has seen Air Berlin rapidly evolve, through a string of acquisitions, into Germany's second largest carrier carrying 35 million passengers annually. While the versatile Air Berlin has never easily fitted into the low-cost carrier camp - and the company itself has always distanced itself from such a description - it marks the first time an airline from a non-network carrier background has joined one of the big alliances. The airline does provide full-service carrier offerings, such as a loyalty programme, free onboard drinks and meals or snacks and a dual class service on its long-haul flights. Short-haul flights are operated within single-class cabins.

Interestingly Air Berlin serves the London airports of Stansted and Gatwick, but not the Heathrow base of BA. Walsh though says the two have still been able to benefit from partnership. "We feed traffic into the Air Berlin network. They sell customers on the BA network, we sell customers on the Air Berlin network. We get great benefits from having strong brands and strong sales presence in these markets," he says. "Even where we don't give direct passenger feed to one another, we are benefiting from greater support and presence. Its been very effective since we began codesharing with Air Berlin."

The accession ceremony took place at Berlin Brandenburg International airport. While the new airport which will finally unite the city's airport system does not open for another 75 days and remains a construction site, holding Air Berlin's accession at the airport was symbolic of the importance of the airport to the alliance.

"We offer the ideal condition for such expansion at Berlin Brandenburg International, which will be the third largest Oneworld hub in Europe," says Berlin Airports chief executive Rainer Schwartz. "For the first time an airport in Berlin provides infrastructure that enables large transfer capability. It provides unique opportunities to grow in one of the biggest markets."

Mehdorn is enthusiastic about the opportunity the new airport will provide. "We are going to develop the new airport into a hub," he says. "We are waiting for the new airport, we are very confident it will be ready on time. We are confident it will give us the chance for the first time. Business will grow."

The entry of Air Berlin, which has itself embarked on a major restructuring programme after securing new minority investor Etihad Airways, offers a tonic for Oneworld after a difficult few months for some of the alliance's members. In addition to the collapse of Malev and postponement of Kingfisher's arrival, it has also seen American Airlines enter bankruptcy protection and another member Mexicana remains grounded.

"The airline industry has been in a difficult place for the last year or two," says Oneworld chief executive Bruce Ashby. "We are convinced our business fundamentals will carry us through, not just in a difficult way but with a lot of strength. We do have a few tough spots, but we have a very bright world and bright future."

And Walsh does not believe the Oneworld brand has been damaged by recent events. "If you look over the last few years, all of the alliances have had significant issues and don't appear to have suffered as a result. So you have had high profile restructurings with all of the US carriers, with the exception of American. Everybody knows American was the last one to go into Chapter 11, so there is no issue there.

"Our industry has seen airlines come and go, and will continue to see airlines come and go, I think the alliance has responded well to look after our customers when there have been issues like that, so I don't believe there has been any damage to the Oneworld brand and I think going forward Oneworld will be strengthened by a restructured American," he says. "Anything that makes American more competitive, makes Oneworld more competitive."

Alongside Air Berlin, its partner carrier Niki is joining Oneworld as an affiliate member while new Madrid-based Iberia Express will fly as a Oneworld affiliate member from the outset of its operations on 25 March. Another carrier, Malaysia Airlines, is set to join Oneworld later this year.