Andrzej Jeziorski/COPENHAGEN
LUFTHANSA AND Scandinavian Airlines System (SAS) have forged an alliance linking their traffic systems and putting an end to SAS's role in the European Quality Alliance. No equity exchange is involved.
The agreement, signed on 11 May in Copenhagen, will combine the partners' route networks, allowing SAS to take advantage of Lufthansa's stronger presence outside Europe, and in turn giving Lufthansa the benefit of SAS's Scandinavian, European and intercontinental network. The deal, subject to European Commission approval, comes into effect on 1 January 1996.
While unwilling to speculate on what conditions may be put on approval by the regulators, Lufthansa chairman Jurgen Weber says that he is "...confident that the Commission will subscribe to the notion of competition fostered by resourceful competitors".
Weber says that he can not see any reason why the new alliance should damage existing co-operation between Lufthansa and SAS-rival Finnair.
The new link has, however, put paid to SAS's role in the tri-national European Quality Alliance with Swissair and Austrian Airlines. SAS president and chief executive Jan Stenberg says, that the EQA is "basically not compatible" with the Lufthansa partnership and SAS will have to dissolve its links with the alliance. Swissair, which is acquiring 49% of Belgian carrier Sabena, declines to comment.
Stenberg says that SAS is in preliminary talks with United Airlines, with a view to integrating itself into the existing alliance between the US and German carriers and reducing substantially its involvement with Continental Airlines.
The SAS chief says that the alliance has the potential to boost SAS's bottom line by 5% of its turnover - which amounted to SKr32.3 million ($4.5 million) for the airline in 1994. Weber adds that he expects a benefit in "three-digit millions" of Deutschmarks for Lufthansa, "...if the people in Brussels do what we want".
The partners have agreed that European and intercontinental routes will be focused on the main hub at Frankfurt, while Copenhagen will be a hub for Scandinavian and Baltic traffic, as well as for routes between Europe and north-east Asia. Alongside these hubs, Munich will handle German, European and intercontinental traffic, Stockholm will handle Swedish traffic and routes between the Baltic region and abroad, and Oslo will be the Norwegian hub.
A joint venture is to be formed to operate routes between Scandinavia and Germany using existing airline capacity.
The two airlines will also work together in marketing and sales, co-ordinate and eventually integrate their frequent-flyer programmes, and co-operate in air cargo, ground services and information technology.
Source: Flight International
