The cooperation agreement between South African Airways and Lufthansa is a major boost for the African carrier, while the pact nearly completes the German flag's global net of alliances.
SAA has sought a European partner for more than two years and senior general manager John Hare says few airlines suited its cultural and management style as closely as Lufthansa.
The commercial alliance, involving no exchange of equity, will also result in a cooling of the ardour of the longstanding relationship between British Airways and SAA. Hare says BA 'has a different way of doing business, believing more in major equity stakes than commercial alliances'.
Agreeing Lufthansa has more to offer SAA than vice versa, Hare is adamant that the German carrier, seeking to expand its African operations, has much to gain from SAA's connections with Alliance and SA Express. But Lufthansa offers little comment on specific plans for its new partnership.
The carriers will, however, link frequent flyer programmes and codeshare on certain routes. Lufthansa says 'it is planned to extend flight connections between Germany and South Africa and in the medium term develop it into the most comprehensive range of flights between South Africa and Europe.'
The deal brings Lufthansa closer to completing its web of international alliances. The carrier still has a gap in northern Asia, although it already has limited cooperation will both Japan Airlines and Air China. Other parts of the web where Lufthansa could still seek strong alliances are the less stable regions, covering Russia and the CIS, northern and sub-Saharan Africa, the Middle East and the Indian subcontinent. But the German flag's global alliances are certainly the most comprehensive of any major.
The bottom line benefits are greater for SAA through improved services, greater revenue generation and cost saving through codesharing and wider ticket distribution.
'Cost saving will include using each other's facilities like lounges, maintenance and reservation systems, and possibly the cross-utilisation of aircraft, staff training and codesharing,' says Hare.
Also being investigated is the greater utilisation of aircraft, as some of SAA's aircraft are idle in Germany for 12 hours and more. 'Ideally we would like that aircraft to be turned around on arrival and sent to New York as a Lufthansa flight and then return to South Africa as an SAA flight.'
The alliance could also extend to aircraft acquisition. SAA plans to buy at least 10 widebody aircraft over the next three years, but Hare says, 'if Lufthansa has acceptable aircraft for sale or lease, we could see our orders for new aircraft cut back to seven.'
Source: Airline Business
