Singapore Airlines, Lufthansa team up<\/p>\n
By I. Christianto<\/p>\n
SINGAPORE (JP): The German airline Lufthansa and Singapore
\nAirlines (SIA) signed an agreement here yesterday to enhance
\ntheir global competitiveness.<\/p>\n
The agreement, signed by SIA's deputy chairman and chief
\nexecutive, Cheong Choong Kong, and Lufthansa's chairman and chief
\nexecutive officer, Juergen Weber, covers a range of cooperative
\nmeasures including code-sharing, network and schedule
\ndevelopment, frequent flyer programs, product development, ground
\nhandling, customer service, information and cargo operations.<\/p>\n
Cheong said the agreement would take effect gradually
\nbeginning in April next year.<\/p>\n
\"Our alliance with Air New Zealand and Ansett (of Australia),
\nwhich was announced five months ago, was said to be the worst-
\nkept secret. Our alliance with Lufthansa is no different. I'm not
\nsure why it is such a badly-kept secret, especially since we have
\nnot departed from our policy of never commenting on alliances and
\nthe like until we are good and ready,\" Cheong said, adding that
\ndiscussions began a year ago.<\/p>\n
Rumors on the SIA-Lufthansa alliance first broke out a couple
\nof months ago and climaxed last weekend. The agreement focuses
\nonly on the two airlines and there was no plan at the current
\nstage for SIA to join the Star Alliance which was set up last May
\njoining Lufthansa, the Scandinavian airline SAS, United Airlines
\nof the United States, Thai Airways, Air Canada and Varig of
\nBrazil, he said.<\/p>\n
\"Today's agreement is a bilateral agreement. I'm not saying
\nthat we are not considering the Star Alliance,\" he said. \"We do
\nnot comment on anything concerning alliances or equity
\ninvestments until we're ready to do so,\" he added.<\/p>\n
He said that the latest deal was an expansion of a long-
\nstanding commercial relationship between the SIA and Lufthansa
\nset in September 1989 on a joint cargo service linking Singapore
\nand Frankfurt.<\/p>\n
Weber said that alliances had become a common feature in air
\ntransportation.<\/p>\n
\"Our customers have become much more global in their thinking
\nand choices. And this is where airline alliances come in. They
\nare cross-border cooperations. We unite in order to take
\nadvantage of each other's networks, seek synergies and offer what
\nthe customer is looking for: seamless travel and smooth
\nconnections,\" he said. He added that Lufthansa was still eying
\nother chances to ally with other airlines.<\/p>\n
Both executives refused to give estimated figures on their
\ncompanies' growth rates.<\/p>\n
\"It's too premature to predict,\" Weber said.<\/p>\n
SIA's deputy managing director, Michael J.N. Tan, said that
\nweekly services of the two airlines between Singapore and
\nFrankfurt would increase to 22 by next April from the current 14
\nflights.<\/p>\n
According to Cheong, SIA's alliance with Ansett and Air New
\nZealand in the Southeast and with Lufthansa in the Northwest,
\nwould make his company a more competitive player along the
\nEurope-Southeast Asia, Asia-Australia axis.<\/p>\n
\"Frankfurt will be our European hub, just as Singapore is
\nLufthansa's for Southeast Asia and Australia. The knowledgeable
\nobserver and analyst will understand why we in SIA are so pleased
\nwith these agreements,\" he said.<\/p>\n
SIA also announced yesterday that it had broken off its
\nalliance with Swissair and U.S.-based Delta Air Lines.<\/p>\n
He said that the Global Excellence Alliance among SIA, Delta
\nand Swissair, in the meantime, would have to be redefined as the
\nresult of the new partnership signed yesterday.<\/p>\n
\"Those joint activities that are not in conflict with our
\nLufthansa alliance can continue if the parties concerned are
\nagreeable. Where there's a conflict, the activities will have to
\nbe phased out at a mutually acceptable pace. Our code-sharing
\nwith Delta between Singapore and New York is one such example,
\nsince we will be code-sharing with Lufthansa on this route,\"
\nCheong said.<\/p>\n
Lufthansa, formed in 1926, carried 41 million passengers last
\nyear. The Frankfurt-based airline operates 314 aircraft serving
\n458 cargo and passenger destinations around the world. The
\ncompany, which accomplished almost 18 percent of its turnover in
\nAsia last year, booked a Dm 327 million (some US$192 million)
\noperating profit in the first half of this year.<\/p>\n
SIA was established in 1971 after splitting from Malaysia-
\nSingapore Airlines which first flew in 1947. The air carrier
\ncurrently has 80 jets, serving 77 destinations in 42 countries.
\nThe company, which booked an operating profit of S$441 million
\n(some $293 million) in the April 1996 to Sept. 1997 period,
\ncarried over 12 million passengers in 1996.<\/p>",
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