Lufthansa's BMI Joins Atlantic Joint Venture, Swiss And Austrian Next - Business Travel News

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Lufthansa's BMI Joins Atlantic Joint Venture, Swiss And Austrian Next

April 14, 2011 - 10:10 AM ET

By Amon Cohen

Lufthansa subsidiary British Midland International has joined Atlantic Plus-Plus, the German flag carrier's joint venture, which also includes United Airlines, Continental Airlines and Air Canada. Although no official announcement has been made, BMI became part of A++ on April 1. Fellow Lufthansa subsidiaries Swiss and Austrian Airlines will join on July 1.

Marianne Sammann, U.K. general manager for Lufthansa, Austrian and Brussels Airlines, told BTN that A++ also is seeking antitrust immunity to bring Brussels Airlines into the group. The process of integrating the Belgian carrier has taken longer because Lufthansa has not yet acquired all its shares. Lufthansa in 2009 bought 45 percent of Brussels Airlines and has the option this year to buy the rest.

Some corporate customers have expressed concerns that airline joint ventures, which enable participating carriers to coordinate fares and sales, reduce negotiating options, but Sammann said that expansion of A++ would lead to more simplicity, choice and value to the corporate market. "Businesses want simplicity," she said. "This gives them one-stop shopping and seamless combinability." Sammann added that corporate clients will have to deal only with one point of contact and will have single, "metal-neutral" contract targets.

As an example of the increased options available, a traveler flying between the oil industry cities of Houston and Baku on the same negotiated fare now can fly the European leg of the trip outbound via Frankfurt with Lufthansa and return via Heathrow with BMI.

Asked whether clients could choose to deal with some but not all A++ carriers, Sammann said: "As it's a joint venture, it is one product. What we can do is tailor-make a deal for the client's portfolio needs, and they can decide by which hubs they want to travel."

Sammann confirmed that Lufthansa will load corporate fares on behalf of all members of the expanded joint venture in Europe. "Revenue management and loading of fares is done by one center, which is very efficient," she said.

Not all corporate travel experts agree. "We have had challenges getting Lufthansa to file fares for other Star Alliance carriers," said one airline procurement consultant, speaking anonymously last month to BTN. "It works to its own timetable. There is a lot of frustration about it, even among other Star Alliance airlines, because if their fares aren't filed, then clients aren't going to fly with them." Sammann said she was unaware of any such problems.

Meanwhile, the Lufthansa Group almost has completed integrating its subsidiary airlines' European sales activities, Sammann said. As an example, in the United Kingdom, Sammann in April 2010 assumed responsibility for Austrian and this month added Brussels Airlines to her remit. Swiss co-locates in the same U.K. office, albeit with its own general manager, while BMI maintains its own sales team in its home market.

Sammann said Lufthansa has made similar but not identical arrangements throughout Europe. "We have reached maturity in the process," she said. "We can deliver one contract for the corporate client, with combinable rates. We have also aligned our neighborhood traffic," meaning that Lufthansa offers the same fare on routes from the United Kingdom to Switzerland, Austria, Belgium and Germany regardless of which of the group's airlines operates the flight.

In the United States, Star Alliance member US Airways last summer expressed interest in joining the A++ joint venture, but president Scott Kirby last week said those efforts won't come to fruition any time soon. "Right now, United is trying to finish its merger with Continental and has more important issues on its plate," Kirby told BTN. "I don't think you'll see anything imminent, and maybe never, but it's certainly a possibility over time."

Jay Boehmer contributed to this report.

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