Lufthansa's Spending Spree
 

http://business.timesonline.co.uk/to...cle4744715.ece

Other than it's investment for a near 20% stake in Jetblue, LH is also into bmi for 20%(with options for full ownership coming due), plans a newly agreed to 45% stake in Brussels Airlines, and is in talks to purchase SAS (Scandinavian Airlines), which owns Spanair, outright.

They are also considering forming an alliance with Virgin Atlantic and bmi to combat the likely AA/BA tie-up.

LH, more than anyone else it seems, is jumping on the opportunity of depressed Market Capitalization in the industry. A long-term bet they hope will pay off big. Don't look now, but the German economy seems headed for a fall.

However you look at this, LH is not sitting on the sidelines.

LH has been in bmi (BD) for a relatively long time now. And most of the BD loyalists are worried about the imminent takeover as they expect that LH will exercise their rights and suck the Diamond Club program into Miles & More. From the JetBlue perspective, I think M&M would be better than TrueBlue, but that's a whole different story.

This brings up a question for me. The speculation is that there would be, along with some form of synergy between LH and B6, a tie-up of their FF programs in some respect.

If these possibles become a reality, in what form would we see the resulting tie-up take? Are we talking 1 TB point equaling so many M&M miles or something more foundational and far-reaching? Are there any historical examples in a situation like this that may shed some light?

I do not think that there is a historical precedent because so few programs do the "points" thing instead of miles/kilometers. If it were to convert I'd assume that they'd assign a number of miles per point (likely 250) and go from there. Earnings would likely also be converted to miles rather than points. This is all wild speculation, however.

It would be nice if SAS did get picked up, and as a benefit of same got JK some new planes. Their model of doing things has been praised here and would be much better if they had efficient jets instead of old Mad Dogs.

Another article, this time from Aviation Week:

http://www.aviationweek.com/aw/gener...e&channel=awst

I thought that with CO's imminent entry into *, LH would not be interested in JetBlue.

More interesting stuff:

"It is also looking at taking stakes in or ownership of Alitalia; LOT, a Polish carrier, and Austrian Airlines "

If a number of things happened first then this may fulfill itself. It would take an effort by existing US Star members to commit on a large scale to JFK, for one. LH is heavily invested in JFK, founding members of Terminal 1 and a large cargo operation and although they may move some of their flights to EWR they won't jump ship completely. US and UA have flirted with JFK in the past but have mostly left it to the other two legacies and Jetblue. Additionally, LH's investment in B6 is an investment they would like a return on, whether it be for B6's connecting pax or just a well-run, profitable airline. Their commitment(insistance IMO) to 2 board members(CEO SwissAir, CFO LH) on B6 BOD's is not a sign of disinterest and admittedly B6 is the only US airline LH has put a stake in.

Would LH have made this investment in B6 now had they not earlier? Not sure.

I don't think that the AZ option is going to play out. They were talking about it a lot off an on while AZ was busy going out of business, but at this point I believe that LH has (smartly) walked away. In the meantime, LH has announced plans to base 6 planes at MXP as AZ scales back there. Way easier and more efficient than buying AZ.

I think that the main impetus for it was the fact that LH saw the B6 stake available at a great discount - it was pretty cheap - and they saw potential for B6 to be successful and be a solid return on the investment. Plus B6 was pretty desperate for the cash. I don't know how B6 would appear to LH now, but I'm guessing that LH still would make the move. That seems to be the way they are playing things these days - very, very aggressively.

And right you were...

I guess they got busy with someone else. Add Austrian to the list.

http://afp.google.com/article/ALeqM5...bsMSxhWd-_2EdA

I had forgotten about this thread...

LH has finalized the deal with bmi to buy out an additional 50% of the company, with that transaction expected to close in mid-January. It was inevitable, and now there is a date for the action.