As I mentioned last night, a press conference was held this morning in Abu Dhabi between by the leadership of Lufthansa and Etihad Airways as they announced an expansion of their relationship.
If you remember from yesterday, I wrote about Lufthansa assisting Etihad’s MRO operations as well as Lufthansa’s LSG Skychefs catering business to start providing catering for Etihad flights. Here are additional details:
The deal for the aircraft maintenance and catering is worth $100 million. The catering part of the agreement includes a 4 year contract by which Lufthansa will provide all of the catering services for Etihad flights in 16 cities through Europe, the Americas, and Asia. LSG Skychefs will be Etihad’s largest supplier of on board catering outside of Abu Dhabi (Etihad’s home base).
The MRO part of the deal includes a ‘Memorandum of Understanding’ that will see Lufthansa Technik and Etihad work as a team to provide a variety of maintenance services to Etihad’s fleet as well as Etihad’s partner airlines such as Alitalia and Air Berlin.
Also part of today’s announcement was the fact that there will be expansions to this relationship as time goes on. It was noted that there may be additional agreements covering passenger services and cargo.
A new part of their cooperation that was announced today stated that Etihad will move its operations in Munich and Frankfurt to terminals where Lufthansa flights operate from. For Munich, this means no longer will Etihad have to suffer in the dreary Terminal 1. They’ll be moving their operations to Terminal 2 and Satellite Terminal 2. In Frankfurt, this means that Etihad will now fly from Terminal 1, whereas perviously they were operating out of Terminal 2.
This makes all the sense in the world because of the new codeshare arrangements that have been created between Etihad and Lufthansa. It would make for bad logistics if passengers had to travel between terminals and go through multiple security checks to get to their codeshare flights.
And no, there was no announcement about Etihad joining Star Alliance.
Ahead of an announcement expected from Etihad and Lufthansa tomorrow from Abu Dhabi, details are starting to emerge regarding a deepening relationship between the 2 carriers.
Building on recent developments including Lufthansa’s take over of certain Air Berlin aircraft and routes in order to reduce the burden for Etihad (A large stake holder in AB), it appears now that Etihad is set to further seek Lufthansa’s assistance as it tries to re-sort itself.
Coming from various news outlets, including Bloomberg, it appears that Etihad is set to transfer their MRO operations (Maintenance / Repair / Overhaul) to Lufthansa Technik. Additionally, Etihad will transfer their catering operation to Lufthansa’s LSG Skychefs. There is also the potential for the relationship to expand to include Lufthansa handling much of Etihad’s security and ground services in certain parts of the world where both airlines are present. I expect we’ll find out the timing of these transactions during tomorrow’s event.
There has also been some chatter regarding the potential of Etihad joining Star Alliance, but that seems to be a bit of a stretch at this point based on Etihad’s involvement with other partners that are in direct competition with Star Alliance. But one never knows what can be announced.
There may be more to the announcement tomorrow, so you may see a follow up to this post.
Yesterday I shared the news breaking from the Italian media regarding a potential blockbuster deal that would join Lufthansa and Etihad.
Fortunately, it appears that the sides were not in any serious conversation regarding combining themselves into some strange Eur-Abic airline.
Unsubstantiated rumors from the Italian yellow press (specifically Il Messaggero) suggested that Etihad was prepared to take as much as a 40% stake in LH. Maybe ‘Il Messaggero’ just needed the page hits for their website revenue so they threw something out there to gain some attention.
This time, sources I deem reliable quashed such a notion as unrealistic due to the obstacles involved in such a combination.
At least I was on the record from yesterday’s post casting my own doubts and not running any ridiculous ‘What If’ scenarios that were running rampant on the Interweb.
In reports coming from Italian media (Italian newspaper Il Messaggero) this morning, it appears that Lufthansa and Etihad are discussing a merger that would combine the 2 airlines.
As of now, the discussions are said to revolved around 2 options. One being Etihad taking a 40% stake in Lufthansa and the other being a complete merger of the 2 carriers.
This news is just reaching the wires and has not been substantiated by either side, so there may be more smoke than fire to this development. However, LH and Etihad have been working closely together when dealing with Air Berlin, so it should come as no surprise that their conversations may have expanded to included a larger relationship.
There is a myriad of regulatory hurdles that would have to be cleared in order for any serious deal to take place. These regulations limit foreign ownership of a European carrier as well as other restrictions, so it may not be as easy to accomplish as the press would like you to believe!
In an announcement from Frankfurt earlier today, Lufthansa has announced that it has entered into a codeshare arrangement with Etihad geared towards making it easier for the airlines to expand their reach.
The expansion of the relationship between the 2 carriers continues to evolve after LH agreed to lease a substantial part of Air Berlin’s fleet to help AB stave off further financial turmoil. Etihad is a major stakeholder in Air Berlin and they were very supportive of the arrangement which allows AB to refocus their efforts. That deal was finalized today as well.
The codesharing relationship starts in January 2017 and will cover Etihad’s 2 daily flights between Frankfurt and Abu Dhabi and their 2 daily flights between Munich and Abu Dhabi. What this means is that there will be an Lufthansa flight number (LH xxx) assigned to the Etihad operated flights, so that Lufthansa passengers can book travel on those specific Etihad flights directly from LH.com or through their travel agents.
In turn, Etihad will will assign their flight numbers to Lufthansa operated flights that operate from Frankfurt to Rio de Janeiro and Bogota. This allows Etihad to book their passengers directly onto these LH flights.
Please note that flights operated by Etihad will not earn any miles towards Miles & More balances, or any other Star Alliance Frequent Flyer program.