COLIN BAKER ROME

Having secured its position on its northern and eastern flanks through alliances with SAS and Austrian, Lufthansa has turned its attention to Italy, agreeing to a codeshare with Air One. The German carrier has also gained a foothold in China - one of the few areas not yet covered by its Star Alliance - through a codeshare with Air China.

The codeshare with Air One, which operates out of Rome-Fiumicino, complements Lufthansa's existing codeshare agreement with Trieste-based Air Dolomiti. Gabriel Leupold, Lufthansa's vice-president for western and southern Europe, says the German carrier's strategy is "fulfilled" by the Air One deal, as covering Italy requires a two-partner strategy - one to cover the north and one the south.

Lufthansa's code will appear on all Air One domestic flights, while Air One will codeshare on all of Lufthansa's Rome flights. Lufthansa gains access to Air One's trunk routes from Rome to Milan Linate, Turin and Venice as well as the busy Naples-Milan route.

Air One has spurned Milan Malpensa (except for the occasional charter flight), focussing on Milan Linate and Bergamo's Orio airport. President Carlo Toto says the alliance offers his airline "great advantages", as "Air One is much stronger than in the past. We are leaving the start-up phase behind," he says. Lufthansa airline board chairman Karl-Friedrich Rausch said there were no plans to take a stake in Air One yet.

Lufthansa also has a 26%stake in Air Dolomiti and has increased its Italian market share from 1%to 11%through the Air One deal, giving it a head start in its most important travel market after the USA.

Italian flag carrier Alitalia is still seeking a major European partner following the demise of its partnership with KLM. Air France and SAir are both talking to Alitalia about joining their respective alliances. SAir has part-ownership of two north Italian carriers - recently merged Air Europe and Volare - although these carriers deal mainly in charter traffic.

British Airways has a southern Italian link through start-up, Rome-based National Jet Italia. Any sale of Meridiana, touted as a potential partner for a European major, will have to wait until Alitalia's future is clarified.

Lufthansa and Air China have signed a codeshare agreement. Although there are no plans for the latter to join the Star Alliance for the time being, the agreement goes some way to filling one of the key holes in the Star's network. Air China also codeshares with Northwest Airlines across the Pacific.

Source: Airline Business