Star Alliance believes joint buying will take off

5 April 2012

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5 April 2012 | Angeline Albert 



Airline network the Star Alliance hopes to leverage greater economies of scale by jointly sourcing more goods and services for its members.



The network, which is made up of a 26 member airlines, is exploring the possibilities offered by joint procurement of in-flight entertainment after the success of a combined seat buying deal involving three alliance members last year.



Star Alliance director of strategic sourcing Steven Collard said the group’s drive to standardise services and drive greater economies of scale has led it to investigate collaborative sourcing opportunities for in-flight entertainment.



It follows a joint procurement project by Star Alliance members Lufthansa, subsidiary Austrian Airlines and Air China for long-haul economy class seats. After conducting a tender in which aircraft cabin interior manufacturer B/E Aerospace was chosen as a sole supplier. Lufthansa will equip 39 aircraft with the Star Plus seat from 2013 and Austrian Airlines will equip 10 aircraft with the same seat. While colours, fabrics and logos will change depending on the airline, the seat architecture will remain the same.



The joint sourcing efforts follow the Alliance’s objective, when established in 1997, to offer procurement and cost saving opportunities for airlines. Star has offered joint services, such as Star-branded lounges and cross-utilisation of ground staff and its combined buying efforts make the alliance more attractive to members from a cost perspective. The group is also exploring how carriers can transfer their aircraft to other carriers to adapt to changes in seasonal demand, for example.



In a statement the Star Alliance said: “Our member carriers can continue to offer differentiated products while at the same time working together to drive synergies, lower costs and enhance the passenger experience.”



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