Battles in the global aviation market no longer pit only airlines against one another. Today’s players are multilateral alliances.
Karl-Friedrich Rausch, chairman of the Airline Board and chief operating officer at at Lufthansa German Airlines, said that for some airlines, the connecting hub systems offered by alliances will be the next step in expanding business.
“This step will be made in the aviation industry in three to five years,” said Rausch, who was in Japan for a ceremony to mark ANA’s upcoming entry into Star Alliance. “By liberalizing, all big airlines are organizing hubs.”
Under the hub system, an airline tries to concentrate international and domestic connecting flights at one airport. By coordinating flight schedules with long-haul flights, the system benefits customers by shortening layovers and helps airlines cut costs by reducing the number of aircraft and flights.
Lufthansa, the second largest international passenger carrier in 1997, is based has a major hub in Frankfurt and a smaller one in Munich. More than 60 percent of its passengers arriving in Frankfurt make other connections, according to the carrier.
With the hub system, a multilateral tieup like the Star Alliance can bring member airlines significant benefits, Rausch said.
“Multilateral alliances bring more advantages than a bilateral contract with another airline,” he said, adding that a trilateral partnership is at least necessary to offer services in key markets such as Asia, Europe and North America.
With air traffic in Asia expected to rise in the next century, Rausch said ANA will allow Lufthansa and Star Alliance to provide better service and flight schedules to customers.
Currently, Lufthansa has 19 flights a week between Japan and Frankfurt, plus four joint operations a week with ANA, which began in February. It plans to increase the number of code-sharing flights.
“Together with ANA, we have a very strong position in the Japanese market, which is the biggest for us in Asia,” Rausch said, adding that his airline is looking for additional partners in Asia.
Lufthansa, whose passenger route network encompasses 317 destinations in 89 countries, has said it plans to secure long-term growth between 3 percent and 5 percent.
Rausch predicted the civil aviation industry will be completely transformed if market liberalization is further promoted.
“You can’t buy a foreign airline because of traffic rights. (But) this kind of alliance is just one step for future mergers,” he said. “There is no Daimler-Chrysler merger possible in the airline industry for the time being. It will be there in five to 10 to 15 years.” (A.N.)
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