Lufthansa regional director for Canada, Lars Kroeplin, stated the carrier is "very closely" following Emirates' attempts to gain more landing rights at major Canadian airports (QMI Agency/Sun Media, 23-Mar-2011). "We've always lived with competition, and we are fairly convinced that our services are attractive to customers and they stay loyal. So it's basically another operator, and you will work with it," Mr Kroeplin stated. Mr Kroeplin however acknowledged that more Emirates services into Canada would mean less traffic for Frankfurt, Lufthansa's major hub. "The market is just so big. And it would be divided among more competitors, and you would see how it works."
Lufthansa watching Emirates' attempts to gain Canada slots 'very closely'
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Lufthansa and Etihad: equity tie up could further align mutual strategy, but marriage unlikely
Greater cooperation between Lufthansa and Etihad reflects their local and global challenges growing in quantity and complexity. Contact between the two has led to speculation that the partnership could radically expand to include an equity tie up, with rumoured merger talks.
Their initial Dec-2016 codeshare announcement was, in practical terms, small but showed the possibility, as they stated, to expand cooperation. However, it would be a leap to go from their handful of codeshares to a 17-Jan-2017 article from Italian daily newspaper Il Messaggero that Etihad could invest in Lufthansa on the way to a possible merger between the two. A subsequent denial in a Reuters story that "A financial stake is out of the question at the moment", does little to dispel the rumour. Were it not for the last three words of that statement the rumour would lack credibility.
There is certainly logic for a deeper partnership - and the two have danced this waltz before. Equity involvement from airlines can cement partnerships, add to board influence and partially allow one side to gain financially from any matter it feels it is compromising away. Nevertheless, there are obstacles to a full blown merger, and even to Etihad's taking a 30% to 40% stake. A marriage between the new bedfellows does not seem an immediate prospect. Nonetheless the logic is there for a move; and the mere fact of a potential move is sufficient to rock the equilibrium.
Lufthansa and Etihad bedfellows - at last - but unions may make marriage a distant prospect
There can be no understating the symbolic change in mindset of Lufthansa agreeing to partner with Etihad. Lufthansa has spent the better part of a decade rallying against Gulf airlines to the press, lobbying in Europe's power corridors and seeking a range of aeropolitical measures to wind back new competitors. Etihad has been the prime target for its investment and ongoing top-ups in a range of European airlines including Lufthansa's home competitor, the failing airberlin. Despite that, it is not well known that the two have come close to a liaison before, suggesting that each sees an intrinsic logic in a relationship.
The partnership has potential to be more significant than Emirates-Qantas, Qatar-IAG or Etihad-AF-KLM. But for now it is limited in scope and caution should be exercised in extrapolating too far at this stage.
Lufthansa CEO Carsten Spohr is seeking new growth platforms that sidestep the flagship business' uncompromising unions who would seemingly prefer a status quo that exists only in memory. Their support will be necessary if the partnership is to work and grow. Then Lufthansa, which has rallied the Star Alliance and JV partners against Gulf airlines, will need to explain its change of heart. For now Lufthansa will not partner on Etihad's beyond-Abu Dhabi network, a move that would embrace the fundamental business plan of Etihad and peers. That upside remains a matter for speculation.