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NEW YORK - Deutsche Lufthansa's surprise swoop for a 19 per cent stake in discount US carrier JetBlue Airways could be the start of a large-scale ownership grab in the global airline industry.
Lufthansa's plan to invest US$300 million ($391 million) in JetBlue establishes a bridgehead for Europe's third-largest carrier in the important New York market a few months before traffic between the US and Europe is due to be liberalised.
With talk of mergers among US airlines in full swing, Lufthansa's move could prompt other international carriers to secure partners in the world's largest air travel market, as competing global airline alliances tussle for key assets.
"I think we're going to see more of these deals," said Stuart Klaskin of aviation consultancy Klaskin, Kushner & Co. "I think you'll see partnerships of foreign airlines buying stakes in US carriers."
New York's John F. Kennedy International Airport, where JetBlue has its hub and jostles for dominance alongside AMR's American Airlines and Delta Air Lines, is a linchpin for European and other international carriers.
The airport offers access to the lucrative New York market and connections to destinations throughout the US. But delays have been chronic and could lead to a clampdown on arrivals and departures.
"The primary strategic play here is JFK," said Bill Swelbar, a research engineer at MIT's International Centre for Air Transportation.
"With the world's focus on JFK and slots at JFK, how that may stand in the way of international service from one of the most important points on the global map is very important," he said. "Clearly the wheels are turning in the minds of the strategists."
Lufthansa's move comes as its Star Alliance - one of the three major global airline partnerships - expands aggressively. Star Alliance, which vies with American Airlines' oneworld and Air France's SkyTeam, allows airlines to widen their reach through connections with partner airlines.
State-run national carrier Air India said last week it would join Star Alliance, which also includes UAL's United Airlines and Air New Zealand. The week before, Air China and Shanghai Airlines formally joined Star Alliance, as it adds partners in key Asian markets.
To counter the expansion by Lufthansa and Star Alliance, Air France, which is already bidding for its SkyTeam partner Alitalia, might be interested in securing its partnership with Delta. Likewise, British Airways and American Airlines could be forced into the fray.
But US regulatory approval could still hobble Lufthansa's ambitions and thwart other deals too.
- Reuters
