The clearance for Lufthansa's alliance with SAS in mid-January gives the German carrier a near-global coverage of partners but for one UK minnow it spells a period of uncertainty.
As expected the European Commission cleared the alliance eight months after the initial accord, but imposed what Lufthansa chairman Jürgen Weber terms 'tough but fair' conditions. The green light from Brussels means the German carrier has concluded two major codesharing deals in a month, having finalised its partnership with South African Airways in December.
But the fallout from the SAS alliance has left UK independent Business Air in limbo. Lufthansa holds a 39 per cent stake in the Aberdeen-based carrier but is now also linked to the largest UK independent British Midland, through SAS' 40 per cent stake in parent Airlines of Britain.
'Lufthansa wants to sell its stake in Business Air because of the link with British Midland,' says Moritz Suter, president of Crossair, which holds a further 39 per cent in Business Air. 'We are thinking exactly in that direction because of a potential conflict with SAS' stake in Airlines of Britain,' confirms a Lufthansa insider but he insists the carrier will still look at cooperating with the UK carrier at Manchester, where the two carriers were talking about setting up a mini-hub. A decision is likely after a board meeting in mid-January.
Lufthansa and SAS will start codesharing from February on 372 weekly flights between Germany and Scandinavia. The carriers linked frequent flyer programmes from January and have also combined handling, telephone reservations and lounges in the four domestic markets.
The conditions imposed by the Commission mirror those of the Sabena-Swissair linkup. The two carrier's must surrender up to eight slots daily at Frankfurt, Düsseldorf, Stockholm and Oslo to any European Economic Area airline that wants to operate on eight specific routes between Germany and Scandinavia.
Further conditions are aimed at allowing competing carriers with no FFP link access to Lufthansa's and SAS' loyalty programme and ending the carriers' other European alliances (Lufthansa is able to continue cooperating with Finnair in the German-Finnish market.)
The two carriers will concentrate on codesharing on the 'north-south European corridor,' says Stefan Lauer, Lufthansa's SVP corporate strategy. International codeshares 'are something for the future,' he adds, but says the planning process has already started for the north-east Asian corridor.
He estimates the alliance will work through as an extra DM3 million profit for both airlines within two years, but stresses 'the potential is much higher.'
Lufthansa will start codesharing with SAA on 29 weekly flights from April.
Mark Odell
Source: Airline Business
