Monday, August 31, 2009

JetBlue Hopes to Go International With Lufthansa

JetBlue and Lufthansa said today they’re hoping to start code-share operations.

If approved by the DOT, the initiative will allow JetBlue and Lufthansa to jointly operate service between 12 JetBlue cities in the U.S. into 180 Lufthansa cities in Europe, the Middle East, Africa and Asia.

The airlines refer to these cities as “destinations,” but I don’t. Remember, an airplane flies both ways.

The future of air travel is gradually coming into focus. Less capacity and fewer options, for sure. But more interestingly, closer working relationships between U.S. and international carriers, like the one American Airlines and British Airways expect to forge with exemptions from anti-trust law, the one Continental wants to have on certain routes with Star Alliance, and the ones already in place between Delta and Air France-KLM, which inherited the one in place between KLM and Northwest when Delta bought Northwest.

I would argue that this movement portends a later one in which airlines will press hard to have the law changed so that a foreign carrier can buy a domestic one outright. But that’s a ways off.

The keystone on all of the existing international arrangements is antitrust immunity. There’s some opposition in Congress — Rep James. Oberstar, chairman of the House Transportation and Infrastructure committee calls these things “immunized mega-alliances.” BUt in general, the trend is going the airlines’ way.

But the trend is clear. The Air Transport Association, the industry’s trade group, is heavily pressuring Congress to grand wide-ranging approval for anti-trust immunity on alliances between U.S. and foreign carriers on specified international routes.

Lufthansa paid $300 million for a 19 percent stake in JetBlue in January 2008, insisting that it was a simple investment in a carrier with a great brand and business model. But a few months later, the Lufthansa chairman, Wolfgang Mayrhuber, told me that JetBlue’s huge presence at Kennedy International Airport, where it is the dominant carrier, was obviously a key part of the investment strategy. All of those JetBlue gates feeding into out of JFK, the most important domestic gateway for international travel.

And remember, an airplane flies both ways.

Here’s the joint JetBlue-Lufthansa statement today. It isn’t yet clear to me whether this planned partnership will require antitrust immunity. Maybe not. Anyone know?


“JetBlue Airways and Lufthansa have signed a codeshare agreement under which JetBlue
would be allowed to place the Lufthansa code (LH) on JetBlue flights.

Initially, the airlines plan to offer connecting service between 12 JetBlue
destinations in the U.S. and Puerto Rico and Lufthansa’s network of 180
destinations in Europe, the Middle East, Africa and Asia. The agreement was
filed today for authorization from the U.S. Department of Transportation

Once a statement of authorization is issued by the DOT, Lufthansa and JetBlue
plan to offer convenient connections between the airlines’ networks, beginning
first with the following U.S. cities:
– Austin, Texas
– Buffalo, N.Y.
– Fort Lauderdale, Fla.
– Fort Myers, Fla.
– New Orleans
– Pittsburgh
– Raleigh/Durham, N.C.
– Rochester, N.Y.
– San Juan, Puerto Rico
– Syracuse, N.Y.
– Tampa, Fla.
– West Palm Beach, Fla.

Customers traveling from these U.S. cities on JetBlue will be able to connect
via New York/JFK or Boston onto Lufthansa flights bound for destinations
throughout Europe, the Middle East, Africa and Asia.

Both airlines are looking forward to the commencement of codeshare operations,
which will allow them to provide their customers with an extended route
network and a seamless flight experience. Pending authorization, codeshare
flights will be available for sale by early October, and will be bookable on, via a link on, or through local and online travel


1 comment:

Jerry said...

I was on a JB flight between JFK and Austin a few months back that had the CEO of both JB and Lufthansa on it. I was thankful for the fact that the inflight service was *stupendous* that day but had been wondering what the deal was....