The European Commission has set out the conditions it will impose before approving the proposed alliance of Lufthansa and SAS, while Transwede and Finnair are putting on a brave face about the prospect of a northern European giant operating in their backyard.
The Commission has notified Lufthansa and SAS of its concern about the dominance the alliance will create at Oslo, Stockholm, Düsseldorf and Frankfurt which all have some constraints on slots. Although the two German airports are more congested, SAS's two hubs also experience some restrictions, particularly at peak times.
'The Commission has said that SAS and Lufthansa must be prepared to give up slots to allow new entrants to come in [to the airports] subject to conditions,' explains a senior SAS source.
Brussels is also likely to insist the two carriers scale back operations on routes currently dominated by the pair - Düsseldorf to Stockholm, Copenhagen and Oslo and Frankfurt to Copenhagen, Stockholm and Oslo - if other carriers want to compete.
Lufthansa is expected to cease buying seats on Finnair's Stockholm-Berlin route and SAS will withdraw from the European Quality Alliance as further conditions to Commission approval.
SAS and Lufthansa may also be required to allow another carrier entering these markets to join their joint frequent flyer programme. All these conditions are in line with Commission's ruling in approving Swissair-Sabena deal (see p11).
Finnair is playing down the effect of the alliance, with executive vice president international relations and traffic politics, Oiva Razjasammal, saying it is 'no big deal', although he admits the loss of Lufthansa traffic will hurt financially.
However, Transwede's vice president marketing Lars Berjolff says the codeshare agreement with Finnair on Stockholm-London/Gatwick was precipitated by the SAS-Lufthansa pairing. And with Lufthansa moving into SAS' terminal at Stockholm/Arlanda, the smaller rivals are searching for a new partner to fill the void in terminal two and provide transfer traffic for their networks. Berjolff says Transwede will lose up to 2 per cent in transfer traffic from Lufthansa. But the carrier could benefit if slots are freed up at Stockholm.
Source: Airline Business
