SkyTeam formally welcomed (29-May-2012) Saudi Arabian Airlines as its 16th member. Upon joining SkyTeam, the carrier has reintroduced the Saudia name, previously used between 1972 and 1996. The flag carrier of Saudi Arabia, Saudia becomes SkyTeam’s first member airline from the Middle East and gives the alliance a strong foothold in the region. Saudia adds 51 new destinations to SkyTeam’s global network, including 23 within Saudi Arabia. Saudia director general Khalid Al-Molhem said joining SkyTeam is "an integral part of Saudia’s long-term transformation strategy, which includes rebranding our airline, restructuring core operations and enhancing onboard products and airport services.” Prior to joining SkyTeam, Saudia embarked on a four-year turnaround programme, which will be completed by 2013. Honour, an aviation brand experience consultancy, designed and managed the brand refresh programme. Other elements of Saudia’s transformation plan include modernising IT, commercial, operational and financial platforms and renewing the fleet by acquiring 90 new aircraft. Middle East Airlines is also due to join the alliance this year. [more - original PR] [more - CAPA Analysis]
Saudia joins SkyTeam as 16th member and first Middle East regional member
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SkyTeam overlaps extensively with Etihad
The second largest of the three alliances overall, but the largest by domestic seats, SkyTeam has a particular strength in Northeast Asia and is the only one of the three alliances to include a cargo alliance. Its North Atlantic joint venture is to some extent complemented by SkyTeam member Delta’s JV with Virgin Atlantic.
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.