JetBlue, Lufthansa Plan Code-Share Deal
August 31 2009 - 10:50AM
Dow Jones News
Lufthansa on Monday announced plans to expand co-operation with
JetBlue Airways (JBLU) in a move that may irk rivals such as Delta
Air Lines Inc. (DAL).
The German flag carrier and JetBlue plan a code-share deal from
early October, a move that will leverage the U.S. carrier's strong
position at New York's John F. Kennedy airport.
Deustche Lufthansa AG (DLAKY) acquired a 19% stake in parent
JetBlue Airways Group Inc. in January 2008, but planned cooperation
required the U.S. airline to first upgrade some of its reservations
technology.
The planned tie had already raised concern from some rivals wary
of efforts by members of the Lufthansa-led Star Alliance to boost
their presence at JFK.
Delta last year called for Lufthansa to drop its two JetBlue
board seats and "restructure" its relationship if it wanted
additional anti-trust clearance for Star members.
U.S. authorities subsequently granted more immunity as
Continental Airlines Inc. (CAL) - which has a strong presence in
the New York area - prepares to join Star.
Delta warned in a filing last year that closer ties between
Lufthansa and JetBlue could lead to "competitive mischief" in the
New York market by the enlarged Star grouping.
JetBlue is not a member of any alliance and has no plans to
join.
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 must be approved by the U.S. Transportation
Department.
"It's now up to the DOT," JetBlue spokesman Sebastian White
said. "But we don't see any problems. We think this will great for
the consumer."
Delta said Monday that it stood by its earlier comments.
Customers traveling from a number of U.S. cities on JetBlue
would be able to buy tickets for connecting Lufthansa flights at
JFK in New York, or at Boston, for Lufthansa flights bound for
destinations throughout Europe, the Middle East, Africa and
Asia.
White said JetBlue's position as the biggest carrier of U.S.
domestic passengers at JFK puts the airline in a good position to
strike more code-share deals with foreign airlines, which are
barred by U.S. regulations from flying from city to city within the
U.S.
JetBlue will have even better ticketing capabilities when it
begins using the Sabre ticket distribution system in January, White
said.
The DOT application asks for permission to code-share on all
JetBlue and Lufthansa flights, he added.
Code-sharing is designed to make booking flights more convenient
for passengers, as well as to add revenue for partner airlines.
Lufthansa provides service from 22 North American gateways,
while JetBlue flies to 10 international locations.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120;
ann.keeton@dowjones.com
(Doug Cameron contributed to this article)