Kevin O'Toole/FRANKFURT
Lufthansa chairman Jürgen Weber has threatened to pursue the European Commission through the courts if competition commissioner Karel Van Miert goes ahead with demands for the surrender of slots at Frankfurt as the price for the airline's transatlantic alliance.
Weber's warning follows reports coming out of Brussels suggesting that up to 100 slots would have to be freed up by partners Lufthansa, SAS and United Airlines. Although Lufthansa has been given no official notification of the numbers being mooted by Van Miert, Weber says that any loss of slots would be "unimaginable" and would cost jobs.
"We will use all the political and legal means at our disposal to oppose all irrational and ideologically based proposals of the EC. If necessary we will even take legal action," he said, speaking in Frankfurt last week at the group's annual financial briefing.
Weber also warns that "many European transport politicians", including those in Germany, will not acceptwhat he calls Brussels attempts at "re-regulation through the backdoor".
The EC opened investigations into all the main transatlantic alliances, after demanding slot surrender by British Airways and American Airlines at London Heathrow as the price for their alliance. Analysts believe that Van Miert is under mounting pressure to appear even-handed by imposing similar conditions on Lufthansa, which responds that Frankfurt is already open to full transatlantic competition.
"Van Miert has already shown that when he comes up with an opening position, he isn't prepared to back down much," says Chris Avery, aviation analyst at Banque Paribas. Van Miert had initially indicated, also in informal briefings, that American/BA would have to surrender up to 350 slots at London Heathrow and, after a year of negotiations, the final figure is expected to stand at 280.
BA is understood to have pushed for its decision to be delayed until the Lufthansa investigation is complete, in an apparent attempt to maintain the pressure. Both investigations are set for mid-May, although Lufthansa says that the date has repeatedly slipped. Rulings on the KLM and Swissair-led deals should follow around September.
Meanwhile, Weber hopes that there may be further "positive" implications for its transatlantic alliance with the announcement of a code-sharing link between United and Delta. Analysts believe that the deal will further weaken Delta's links with the rival Swissair-led partnership, giving it instead the chance to co-operate with Lufthansa and United within the Star Alliance.
Lufthansa has revealed that Star gave it a benefit of DM400 million ($220 million)last year, a fourfold increase on the first year in 1996.
Helped also by the results of two years of heavy restructuring, the group overall turned in a "best-ever" pre-tax profit of more than DM1.6 billion in 1997. Weber believes they will improve again this year, pointing to strong first quarter profits of DM125 million, against DM20 million a year ago. On top of that came earnings of DM377 million from the recent sale of the group's 18% share of Hapag Lloyd. This was part of a re-organisation of tourist operations.
Further gains are expected to come over the next 12 months from the flotation of the group's LSG catering arm, as well as DHL International and the Amadeus reservation system in which Lufthansa holds shares.
Source: Flight International
