31 August 2009

LH Tightens Grip and Gets Toe Hold In USA

Not content with its first foray into the English Speaking geographies via the UK through its BMI acquisition, Lufthansa is now carving its initials on jetBlue. It already owns nearly 20% of the equity and now it has filed for a set of code-shares from JFK and presumably other markets in order to bolster its presence in the New York market.

With United focusing on its very close relationship with new BFF Continental, LH wants more than just a casual relationship for one of the larger US market. While the code share arrangement was almost inevitable (LH has never yet taken an equity position in another carrier without a code share deal), one cannot help but think the recent mega slot swap in New York (which made Delta the top dog) didn't have some bearing.

Most especially LH was left with almost no feed at JFK clearly a condition that the German mega carrier could not let continue.

This is a win win for both carriers. JetBlue gets access to Transatlantic feed (EI's marketing agreement doesn't exactly create head spinning numbers). LH gets domestic feed to just about any market with convenient connections throughout the USA all the way from San Jose to Burlington VT.

The new reality of coach/economy travel and a comparable product in the back cabin makes for an easy fit.

Don't expect this arrangement to be a rush job. jetBlue's aging Navitaire OpenSkies system has a hard time with connections. So the full implementation of the code shares may have to wait until SabreSonic comes up fully.

Also an interesting side note here, the timing cannot just be coincidental. With CO getting ATI approval just weeks before this announcement - it makes for some interesting discussions about the dominance of Star Alliance. Perhaps some of Justice's fears were not unfounded. Someone at Dept of Transport must be thinking that they didn't pay full attention to this eventuality. Perhaps even Mr Oberstar can raise the issue again. However the door of the stable is likely have any impact on that herd of horses who are long gone! All in all competition across the Atlantic has been decidedly lessened.


1 comment:

Roberg said...

This puts JetBlue's decision that was announced last week to become a member of ARC in a different light. It makes total sense.