As it presses ahead with major advances in IT integration, the Star Alliance is looking to increase commercial joint ventures in other areas such as the buying of jet fuel.

Star chief information officer Mike Stagl says the alliance carriers have begun to access flight and availability data of other members through the Starnet middleware IT system.

This comes as three alliance members, Lufthansa, United Airlines and Air Canada, prepare to announce their choice of vendor for a joint IT platform early in the new year.

The two options are consortia which are led by Lufthansa Systems and global distribution provider Amadeus. Lufthansa is taking the lead on this decision, with its two partners currently preoccupied with their wider financial problems. Other Star partners could join the three carriers at a later date.

The alliance's next major step in IT, meanwhile, will be global electronic ticketing by the end of 2004, through Starnet. Stagl said at the Star Alliance chief executives meeting in Tokyo in December that the completion of the middleware represented a major achievement in interoperability for complex systems with many different underlying systems.

Star is considering commercial sales of its skills to other network industries, said Stagl. Chief executive of the alliance Jaan Albrecht said that the "ultimate level of integration is to have a single reservation system", but that is thought to be some time off.

In the short term, Albrecht says, the alliance will increase its initiatives to create joint commercial ventures in response to low-fare competition around the world. The low-fare carriers are "biting into our customer base… the business model is changing rapidly and this is posing a challenge to the established networks", he adds.

Albrecht says Star will formally establish a joint company to buy jet fuel more cheaply this year. The new unit, FuelCo, will be based in the USA, but will manage procurement of jet fuel "at selected airports around the world" on behalf of all Star members.

Alliance members have co-operated on fuel purchases on an ad hoc basis at various airports, but this initiative would be alliance-wide.

"We are talking about horizontal integration, about forming joint venture businesses and sharing assets and even going to a level where we could share the most important asset in our industry - the aircraft," Albrecht says, adding, however, that this step is still "years away".

However, four Star members - Air Canada, Austrian Airlines, SAS and Lufthansa - have completed agreement on a common specification for a regional jet purchase, Air Canada chief executive Robert Milton confirmed.


Source: Airline Business