When do you expect to hear from Lufthansa?

[ZMAN777]

FWIW,

Amidst all the wrangling between the various U.S. airlines and now BA, I find it a bit surprising that Lufthansa hasn't weighed into the fray. I'm thinking they've got to be on the phone to GT regarding where he is/isn't taking UA and thereby what it means to our German cousins. To be sure, it's doubtful that they will sit idly by if they can forge a larger presence within the Star Alliance and also expand the same.

Which leads to another question...given the current race to the proverbial altar for many airlines seeking mergers, what of Lufthansa's stake in JetBlue and what it bodes down the line?

Cheers,
Z B)

 

[Ukridge]

It has been probably well over a year since I have frequented these boards but I was curious to see what is happening to United in the post Delta merger announcement. Well, it seems that the iceberg has moved more than a millimeter and suddenly there is a frenetic rush to make things happen.

I think Messieur Z's question is apt. Where is LH? They performed admirably with Swiss to such an extent that it is said (sorry, no source but one needed if we could treat this as Wikipedia!) that the Alpenlaenders are producing higher unit revenue than the "old" LH. The Italians have been eyed by AF and LH and that seems to be off the table at the moment. JetBlue probably cost LH no more than what the secretary keeps in the petty cash drawer for incidental office supplies so where indeed is the Bund?

I am surpirsed that no one has chimed in on this question. Cosmo? Are you still extent? One side would say that LH only needs to wait on the touchline. United over the years has eagerly given LH what it has wanted. United has been polite enough to stand aside while LH expands its presence in such cities as Denver and Washington and already flies non-stop from (a rough look at the route map) almost 20 other U.S. cities. Granted my knowledge of U.S. geography is not expert, but why would one need to get on a United regional flight to go to a hub when there is a good chance that LH is flying to the nearest big city? (Dallas, Houston, Detroit, Portland, Vancouver (yes Canada), Philidelphia, Boston etc.)

I would have to ask, how much more value would United directly provide for LH? With LH covering the U.S. like a smoothering blanket and United pouring passangers into LH's big FRA and MUC hub, why frankly should they do anything but sit back, relax, and enjoy the revenue that United provides to them for so little effort in return? With all due respect, United has been spurned by Continental so the chance of United finding a new alliance home is nil.

Second, I would imagine that LH would be concerned about accountability of any investment. Looking purely at a peer competitor level, I would think (but again would ask for factual backup) that Mr. Tilton has not instilled the greatest faith in his husbandry of United. Irrespective of the problems faced running an airline, would anyone think that he is making money for the investors? Always "just ready to turn the corner" seems to be thin gruel after all these years and grows old. Why was work not done over the past years? Why is it always "to be done?" The question that LH would have to ask is whether there is any intention whatsoever to run the airline or merely to parcel it up and away. Is there any value as an ongoing economic entity? If not, why would LH invest?


Just musings. With Emirates (yes, not in the Star) hitting NY from Dubai, Singapore non-stop to LA and NY, LH covering the U.S., South African adding an African opening, the route structure of United looks to be on thin legs. Not to sound cruel, but I am sure LH is looking at this to see if an investment would be worthwhile. They are buying aircraft, they can just add more flights across the Pond.

 

[casual rat]

Unfortunately, UA's execs are focused on cutting costs opposing new revenue opportunities. I believe they reason, the more cash on hand, the more attractive they look to a partner (warts can be overlooked, if one looks at the purse). Upon merging, the executive 'dowery' would be quite a sum. Rumor has it: Tilton wanted an active role in the merged UA/CO, and to CO's management, that must've looked, well, 'warty'--so no deal. Who can blame them? UA's current Management could write a 'comedy' on how to run a business. When economics 101 is considered, UA is its antithesis. JMHO.

 

[Ukridge]

Casual, I can see we unleashed a serious torrent of dicsussion on the topic. Yawn....zzzzzz...

 

[Cosmo]

Unfortunately, UA's execs are focused on cutting costs opposing new revenue opportunities.

I think today's announcement by United of new nonstop IAD-DXB and IAD-DME service starting in October makes the bolded part of this statement invalid.

And yes, Ukridge, I'm still here!

 

[casual rat]

Wow! IAD-DXB and IAD-DME, ! Wow! UA lost millions/billions of dollars in Cargo Revenue, it doesn't charge for Revenue Standby itinerary changes--which would be Revenue, it doesn't buy planes to replace aging Aircraft that it doesn't clean very well...Hmmm I think there's some validity that UA opposes new revenue opportunities in lieu of cost cutting Cosmo. I see it everyday. I'm pretty psyched about the IAD new service though. Hopefully, it kicks off better than the DEN-LHR service did!

 

[Cosmo]

I never said they weren't focused on cost cutting. I simply pointed out that they weren't opposed to new revenues opportunities, as exemplified by the two new routes. It's not an "either/or" issue.

 

[Ukridge]

Well, well. Fortunately the fortunes of the air industry do not turn on the views or progostications of Ukridge as exemplified by my rather abrupt comments regarding United's ceding flying to the Star. No more than the ink was on the paper (so to speak) with my comments than the announcement of more flying from the Former Colonial capital was announced.

Of course in my own defence and in light of my precipitous remarks regarding Emirates serving NY non-stop, would United have made this move had a Star partner been at the ready to do the flying? If Emirates were in the Star, would United have made this impressively bold move? Stuff for discussion only of course as the decision has been made and the flying planned.

No, beyond the defence of my wholly inadequate commentary, it is impressive to see them go for Dubai. A long way from the US perhaps, but I think one can easily argue that it is indeed THE center of gravity in the region. I am sure Kuwait has its purpose and profitability with the Allied presence in that area, but Dubai's importance is hard to overstate.

What I wish I knew however, is what discussions went on at LH over this. I am sure that LH would like to keep the pax on board to FRA and then shuffle them over, but with Emirates becoming what it is, a non-stop was a must. Was this decision made reluctantly or eagerly? Did it just finally come to the point where United had to do some flying on its own without LH? Either way, I guess in business sometimes you just HAVE to stumble over areas of profitablity and good sense!

 

[RowUnderDCA]

With Euro open skies, could LH operate JFK to CDG, LHR, FCO, AMS, VIE, WAR, BRU, MAN etc, in addition to MUC, FRA, TXL. Hamburg Stuttgart?

Could they operate IAD to CDG, LHR, AMS, BRU, FCO, BRU, ZUR, MAN etc in addition to Gerrman destinations?

Would they pay something for the privilege?