Lufthansa, already with control of Swiss International, is completing its final paperwork to take over Austrian Airlines. This economic conquest will finish a consolidation that has never been achieved politically. The national airlines of all German-speaking countries will be under the same umbrella.
Moreover, Lufthansa will be continuing its steady consolidation of European airlines, adding Austrian Airlines to ongoing purchases of bmi, in the United Kingdom, and Brussels Airlines. Controversy surrounds both of those attempted takeovers with questions being raised about capital requirements in the bmi deal and with competition in the Brussels Airlines link-up.
In the Austrian Airlines deal, the only fly in the ointment seems to be a continuing undertone that Lufthansa is getting away with too big of a bargain. But with no other serious, well-capitalized bidders, the Lufthansa deal looks like it will sail forward. Austrian’s network will give Lufthansa a bigger presence in Eastern Europe and the Middle East.
bmi will give the German carrier a strong footprint in the United Kingdom and Brussels Airlines has a series of links with Africa that should prove valuable in the future. Lufthansa sees air travel continuing its historic growth after this current slowdown and is investing its capital with that in mind.
The Lufthansa model, so far, is not complete integration, but rather the establishment of independent airlines. Each airline maintains its identity and competes to an extent against each other, but coordinates schedules and offers a strong business class service. All these airlines will become part of the overall Star Alliance, adding strength to that alliance’s international footprint.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
