Interview: Star Alliance CEO Theo Panagiotoulias

Theo Panagiotoulias took the helm at the Star Alliance from its Singapore headquarters after gaining 25 years’ experience in the airline and travel industry, including leadership positions at Hawaiian Airlines, Sabre and American Airlines. Star is one of the three airline global alliances along with oneworld and SkyTeam, but Star was the first and was a game-changer when it launched in 1997 with founding members Air Canada, Lufthansa, Scandinavian Airlines (SAS), Thai, and United Airlines. It has grown to 26 airline members, but will lose SAS in September when that carrier transfers to SkyTeam.

—Interview by Karen Walker

What do you think are the biggest changes since 1997 and in how Star operates? When Star first embarked on this with the founding carriers, it was about expanding global reach. One airline could not necessarily serve every destination around the world, and it was all about bringing together members to be able to have that broad network to serve their mutual customers. Star was the pioneer of that, and being the largest alliance in the world, we have 95% of the world covered.

I think what happened over time, there was a pivot from a Star Alliance perspective just prior to the pandemic, around the 2018 period, where the network reach was solidified. It was very powerful. Recognition and rewards for customers were very real and incremental. So, the pivot moved away to a large extent from that, and a strong focus was on the customer experience.

As the pandemic came to the front, we started seeing that becoming an even more important aspect. How I like to frame this from an alliance perspective is, we at Star Alliance serve our member carriers and deliver upon things that the member carriers cannot do on their own. There are so many things that the member carriers can do, but when you are bringing networks together—the interline experience, for example—our focus is to make that as seamless and as close as possible to an online experience.

What is Star’s interpretation of seamless travel and what are the biggest challenges to making that happen? When we talk about seamless, it’s about making the experience as if you are flying the very same airline across multiple sectors. Let’s be clear about it—that is the aspiration, that is the journey that we’ve embarked on. There are so many touch points on a traveler’s journey. So, when you think about the booking experience, when you think about the airport experience, the connection experience, the loyalty experience, when you look at those paths, there are so many opportunities to solve problems for customers. I think one thing that came to the front more than anything during the pandemic is people want to control their own destiny. At the core of that is digitalization and technology. So that’s where the opportunity lies. That’s where the challenge lies as well. So, let’s be open about it. These are very complex problems to solve, and focusing on the seamless experience is an aspirational vision or focus that is never-ending.

How do you think Star differentiates itself from those other two global alliances? I think we’re in a position where we are the largest alliance in the world. We’ve got clearly the best breadth and global network, and it’s unmatched. We obviously look at the network and see if there’s opportunities to enhance it even further. You’re always looking for these opportunities, but by and large, because that network is so solid and expansive, the pivot is now with a primary focus on that customer experience.

We’ve got something else that we’re looking at right now, which will be how do we make irregular operations more practical and more convenient, both for the customer and for the member carriers. It’s complex, so it does take some time, it takes investment—but it’s very clear to us, this is where the sweet spot is.

What are the Star governance meetings like when you’ve got such a broad set of people within that? Constructively lively, as they should be. I think you get many different perspectives to the table, and I think it’s just natural. You’re going to have different business models with different priorities, different focus points. There’s nothing wrong with that. I think you’ll find that that’s a natural course of business. In these discussions, what we’re doing is we’re looking for consensus where we’ve got the customer at the center and in mind, coming up with consensus where we can deliver incremental value. Now at Star Alliance, for example, we have 50 standards that, irrespective of size, irrespective of business model, all the carriers have agreed to; they must meet those 50 standards. We audit those standards very, very strongly on a biannual basis to ensure we’re getting consistency and deliver upon the Star Alliance promise.

SAS will transfer to SkyTeam in September. What will it mean to lose SAS? Scandinavian was a founding member, and I think they are a member that has been appreciated. I know that Scandinavian is appreciative and got great value out of Star. Business evolves, business changes. We wish them all the best in that regard, and we’ll solidify our position.

Now the beauty is that the member carriers of Star serve the Scandinavian market very, very strongly despite Scandinavian leaving. We’ve got 3,700 flights or thereabouts a month connecting to 23 hubs worldwide and serving 1,100 destinations, the most of any alliance. So even though Scandinavian left, we’ve got a really strong position there.

Our number one priority now as the transition happens, and I know Scandinavian is doing the same thing, is making sure we minimize disruption, in particular the impact on the customers. We’re going to be aggressive competitors with them and the alliance that they’re joining, and I’m sure it’ll be healthy with customers benefiting from that.

Is Star still looking for new airline members? The way I would characterize it is we’re always looking for opportunities, but they’ve got to be very selective opportunities that meet specific criteria. It’s got to be value added, it’s got to complement the existing network. We’ve got such a significant network right now. We’re very comfortable with where we’re at, but always looking at opportunities. If any network opportunities arise that fit our criteria and complement and deliver incremental value even further, both to our customers and the member carriers, we will take that very seriously.

Listen to the full interview with Theo Panagiotoulias on our Window Seat podcast here: bit.ly/3M40Uc5