Thursday, December 13, 2007

What Is Lufthansa Thinking? Here's a Guess

What is the German carrier Lufthansa thinking, buying a 19 percent stake in JetBlue, which has no overseas routes but a whole lot of point-to-point routes into Kennedy airport? (Cost of investment: $300 million.)

Two words: Open Skies.

At the end of March, under the new Open Skies agreement between the U.S. and the European Union, European carriers will be able to greatly expand operations in the United States -- assuming they can get the scarce, and soon-to-be-scarcer, airport slots.

And what does JetBlue have? Lots of slots and gates at Kennedy -- where the feds are about to crack down on allocating slots. Not to mention a very good reputation for customer service, last Feb. 14's ice-storm strandings notwithstanding.

Suddenly, it makes a whole lot of sense to me. With British Air already committed to launching a subsidiary airline to fly from European cities to Kennedy and other U.S. cities in May, and with other carriers looking for entry and gateway slots, a new game is about to begin in international air travel. And the buy-in is high.


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