LH takes over SN

What LH wants out of SN

Brussels is a nice little treat for LH. Capital of the EU with lots of business people flying in and out during the week, they will make a nice piece of change. A respectable airline like LH controlling Brussels works perfectly for the carrier. There is no reason to create a hub there. They rely solely on EU traffic to the capital and rake in the eruos. Good stretigic decion on LH’s part.

LH may add transatlantic service. For example it is possible to see them do a Munich-Brussels-Boston flight (possible wishful thinking on my part-I live in Boston). They might also do well in a Berlin-Brussels-New York flight.

Brussels, managed by a well run airline has real possibilities. This is good news for SN.

Bill

The best thing and fairest thing in that situation would be for Alitalia to split and so they both get a big slice of the pie without causing too much political disruption.

Lufthansa appears to be intent of building a European Empire and it seems to be approaching this by buying large minority stakes (large enough to enforce timetable integration), or where there are other potential advantages (whether it be using the acquired Airline to operate the Flights To/From its country to Germany at a lower cost than LH itself, or Fleet/Spares Commonality/Slots etc) full take-over.

If the deals only require finance, than despite its summer strikes LH has excellent credit lines. Based on the Airlines it is known to interested in, then other than Alitalia the financial risk is low and LH could easily handle the ‘corporate liaison issues’ to make the commercial tie-ups work.

If more than two or three ‘deals’ requires the deployment of LH Management Teams and technical assistance (other than IT) then this could stretch resources.

As for Italy, Lufthansa is already building a respectable Italian Operation and providing the restructured Alitalia does actually work even semi-efficiently then a minority stake of 10% would make some sense for getting timetable integration.

Air France-KLM is also trying to build a European Empire and is basically interested in a similar number of Airlines to LH, with some overlap where both want a stake in the same carrier (see below).

What could become dangerous for both LH and AF-KL if they become involved in corporate ‘cat fights’ resulting in bidding wars for minority stakes and therefore paying more for such stakes than they are worth.

For reasons which are beyond me (most things are I guess) are that both LH and AF-KL are attracted to Alitalia like insects to a Venus Flytrap. I believe anything other than a small stake would not be a good idea, for either Carrier.

Kind of ironic

SR (sorry Swiss) and SN back together again!

Bill

We’ll have to start a campaign to stop BD being swollowed up by the giants of Europe. It will come to the stage in only years to come where there will be just 1 maybe 2 or at a push – 3 airlines in Europe. The AF/KLM group, the LH group and some sort of amalgomation from BA.

Who knows?!?!?!?!

Something like:

1) LH/LX/SN, possibly OS, SK, BD
2) AF/KL, possibly a reborn AZ, CSA, OS, MA
3) BA/IB, possibly OS, MA

For the network carriers the only wildcards are Austrian, Malev, TAP and BMI. And I would not be surprised to see BMI go in whole or in part to a foreign (non-EU) airline. With the slots BMI has a take-over might be lucrative for the likes of Emirates. Then there are also Alitalia and Olympic but they will have to liquidate first before they are of interest to anyone.

Then on the low cost front I would expect also 2 or 3 left:

1) Easyjet
2) Ryanair

Those two are a given. Assuming they are not affected by a crash they will last. There are lots of smaller carriers that have their niche, but not enough muscle to break out of that niche and into U2/FR territory. Next to that there are plenty of carriers that are clinging on for life.

Wildcard amongst the LCCs is Air Berlin. They are large, have a good reputation and a very good product. But they are extremely heavily in debt and are still in the proces of merging the 5 (!) carrier they bought the last 5 years (Germania, LTU, FlyDBA, Niki, Balair and they are working on buying Condor). Perhaps they will succeed, perhaps they are bought by someone else now their shares are worth so little. I for one believe that Easyjet would be a perfect match. There is little overlap on routes and the service provided matches quite well.

We’ll have to start a campaign to stop BD being swollowed up by the giants of Europe. It will come to the stage in only years to come where there will be just 1 maybe 2 or at a push – 3 airlines in Europe. The AF/KLM group, the LH group and some sort of amalgomation from BA.

Who knows?!?!?!?!

Right one down, two to go. LH has announced that it was looking to take over SK, BD and SN. SN is now under LH crontrol (*A i would imgagine wont be long around the corner), just waiting for them to announced both SK and BD.

BD though is been looked up and down by EY, Again i dont think they will although you never know what is around the corner in this mad world of avation.

LH is also looking at Austrian. I wonder though if LH has the financial means, or the organisational flexibility, to take over 4 carriers in rapid succesion. I would not expect LH to take over all 4 carriers.

OS is also being looked at by AF/KL and as you mentioned EY is interested in BD.

I wonder how many independant airlines will be left in Europe say 5 years from now.

Right one down, two to go. LH has announced that it was looking to take over SK, BD and SN. SN is now under LH crontrol (*A i would imgagine wont be long around the corner), just waiting for them to announced both SK and BD.

BD though is been looked up and down by EY, Again i dont think they will although you never know what is around the corner in this mad world of avation.