Lufthansa could stay in longhaul flights race

Turkish Airlines link seen as vital

FRANKFURT, Nov 30, (RTRS): Closer ties with Turkish Airlines could keep Lufthansa in the race for longhaul flights to Asia and stem the flow of business to Gulf carriers.

A combination of the German airline, Europe’s biggest by revenues, and the world’s fastest growing carrier would create a group with about 600 aircraft, more than the three big Gulf carriers’ combined fleet of 500 planes.

Westbound traffic is in decline, making eastward growth crucial. Turkish Airlines’ Istanbul hub straddles Europe and Asia and is hours closer to Europe than Gulf airports.

While Lufthansa has not confirmed any plans for strategic negotiations, Turkish Airlines Chairman Hamdi Topcu told broadcaster NTV this month that talks on tie-up expansion with Lufthansa would begin in December.

“Lufthansa is really constrained now in terms of looking for strategic partners. It’s running out of options. Turkish Airlines is still the best option at the moment, and probably its last,” Cheuvreux analyst Peter Oppitzhauser told Reuters.

Lufthansa, whose passenger business is forecast to post an operating loss this year, is slashing costs and cutting jobs to cope with high fuel prices and stiff competition.

Middle Eastern carriers are building alliances and investing in new routes and new aircraft to divert a thriving traffic flow between Europe and Asia to their hubs and lure passengers with lower prices as well as better food and inflight service.

Airlines will add 19 percent capacity on routes between Europe and the United Arab Emirates (UAE) in the first quarter of 2013, partly so passengers can switch planes there, according to UBS which forecasts 12 percent growth on direct Europe-China services. Capacity between Europe and the United States is expected to shrink.

European airlines, meanwhile, are cutting costs and shelving growth plans, hit by high fuel costs and weak markets.

Expanding

Lufthansa said Gulf airlines are aggressively expanding, by offering more seats to Europe and taking stakes in other carriers.

“It is a question of time before Europe’s connections to other regions will be conducted only via the Gulf states,” it said on its website.

Lufthansa, the only major European airline that does not have a Gulf partner, says the three big Gulf carriers enjoy competitive advantages through public subsidies and preferential fuel prices not available to US and European firms.

The Gulf carriers say this is not the case.

Emirates, the biggest Gulf carrier in terms of fleet and number of routes, agreed in September to form an alliance with Qantas, with the Australian carrier replacing Singapore with Dubai as its hub for European flights from 2013.

Qatar Airways, the state-owned carrier vying with Etihad as the second biggest in Middle East, said in October it would join the oneworld alliance, which includes British Airways, while Air France-KLM, Etihad and Lufthansa’s German rival Air Berlin agreed on flight code sharing.

“While nothing is decided or formally announced, a combination of Lufthansa and Turkish Airlines would make the Qatar-oneworld deal and the Etihad-Air France-KLM-Air Berlin code share agreement look relatively like child’s play,” market research group Centre for Aviation (CAPA) said.

Lufthansa and Turkish Airlines together could offer more flights and invest in newer and more fuel efficient aircraft, as well as have pricing power over their rivals.

“Obviously there won’t be an equity tie-up in the near future but (the Turkish state) will have to think of something because (Turkish Airlines) will be privatised,” analyst Alper Paksoy of BNP joint venture unit TEB Investment said.

Turkey’s government appointed a banking consortium to advise it on the airline privatisation last year.

Analysts said the two airlines could form joint ventures initially – for instance in catering, IT and maintenance — and at some stage later agree a crossshareholding. EU and Turkish laws on airline ownership are a barrier to any full merger.

CLERMONT-FERRAND, France: Ryanair is to resume flights from the Aulnat Clermont-Ferrand airport in central France from April 2013 with twice-weekly services to Porto and Charleroi, the local regional council announced Friday.

The council is providing the airline with a 475,000-euro subsidy to provide the services for three years in an initiative aimed at bolstering tourism in the isolated Auvergne region.

Northern Portuguese city Porto was chosen as a destination because Auvergne has a large Portuguese community while Charleroi, in southern Belgium, is a hub for Ryanair.

The budget airline announced on Wednesday it was returning to the Strasbourg-Entzheim airport in eastern France after a 10-year absence triggered by the withdrawal of subsidies it was receiving from the city’s chamber of commerce.

The airline will resume operations from Strasbourg in northeastern France in April 2013 with flights to London Stansted three days a week and to Porto on two days. (AFP)

SYDNEY: Australia’s official tourism agency on Thursday threw its full support behind its boss Geoff Dixon despite claims by national carrier Qantas that he is trying to unseat the airline’s management.

Dixon ran Qantas from 2001 until 2008 when current chief Alan Joyce took over, and their relationship has descended into a bitter feud over the direction the airline is taking.

On Wednesday Qantas severed its 40year relationship with Tourism Australia, cancelling a Aus$50 million ($52 million) deal, “due to a potential conflict of interest of the agency’s chairman”.

It claimed Dixon was a member of a syndicate “committed to unravelling Qantas’ structure and direction”.

But Tourism Australia said Dixon had previously declared his interest in Qantas, in line with governance requirements and, as far as it was concerned there was no “unmanageable conflict of interest”.

“As per regular Board protocols, having declared the interest, chairman Geoff Dixon will continue to absent himself from all matters relating to the Qantas Group,” Tourism Australia deputy chair Kate Lamont said following a board meeting on the issue. (AFP)

TOKYO: Japan’s cuisine is usually associated with the delicate flavours and textures of sushi, but the national airline is opting for an altogether more robust festive meal — KFC chicken.

Japan Airlines will be handing out offerings from Colonel Sanders on some Europe and US-bound flights for three months from Dec 1.

The carrier said it would be dishing up an Air Kentucky meal, consisting of a chicken drumstick and a breast fillet accompanied by bread, lettuce and a cup of coleslaw.

KFC is a popular choice in Japan at Christmas, an almost wholly commercial festival mainly celebrated by young lovers.

The fast food giant’s website says its popularity on Dec 25 stems from the early 1970s when expats in Japan began buying its chicken as the next best thing to turkey, which was not readily available.

The company says young Japanese soon picked up on the idea and the fried meat rapidly became a festive fixture. (AFP)

LONDON: The world’s first panAfrican low-cost carrier Fastjet enjoyed keen demand on its first day of commercial operations, it said in a statement on Friday.

“Fastjet... commenced commercial flight operations yesterday, with its first aircraft flying passengers from Dar es Salaam to Mwanza, and Dar es Salaam to Kilimanjaro in Tanzania,” the carrier said.

The group flew eight services on Thursday from Tanzania and carried more than 900 passengers.

The so-called passenger load factor, which measures the number of seats filled on flights, stood at an avereage of 78 percent, while three of the services had a load factor of 90 percent.

“Future demand for seats on these two initial routes is currently far outstripping supply,” Fastjet added.

“Additional flights to these destinations are already being considered, and the company also intends to expand its route network regionally over the coming weeks as the fleet grows to three Airbus A319s.”

The airline was formed earlier this year by Stelios Haji-Ioannou — the founder of British no-frills airline easyJet — and London-listed Rubicon Diversified Investments.

Haji-Ioannou’s EasyGroup and Rubicon agreed to buy the aviation business of Africa-focused conglomerate Lonrho in June.

“Fastjet is delighted to see how the people of Tanzania are embracing the low cost carrier model,” Fastjet chief executive Ed Winter in Friday’s statement.

“Yesterday was a huge success and a great way to start operations. We are pleased to see reservations and bookings continuing to grow. The demand for this type of air travel has far exceeded the company’s expectations.”

He added: “Passengers ranged from business people through to many first time flyers who were using Fastjet as an economic alternative to conventional bus transport. (AFP)

SAN JUAN, Puerto Rico: The US Coast Guard is searching for a Washington state man who has gone missing from a cruise ship in the Caribbean.

Coast Guard spokesman Ricardo Castrodad says two ships and a helicopter have been dispatched to search for the 42year-old man, whose name has not been released. The man’s wife reported him missing from the Holland America Line cruise ship Eurodam. The ship was traveling from St Thomas in the US Virgin Islands to the Bahamas when the man disappeared early Thursday. (AP)