Although I suspect that all of UA’s merger talk had an effect on the LH-UA business relationship, it seems like LH would probably have proceeded with this deal even if UA was a great partner (from a business point of view, I’m not entirely sure how they are not a great partner, in fact).

I can’t help that a lot of this investment that LH is making has a lot to do with the open skies agreement going into place in March. I mean, within a few months time, LH will have the ability to start planning routes from Europe to the US willy-nilly, and the have a small empire of partial or complete ownership within Europe (including BD, with a hub at LHR). Trouble is, they lack feed to/from the most logical trans-Atlantic gateway (JFK) and they can’t necessarily count on their US-based partners to feed new routes beyond their own hubs. What more, those US-based partners have the ability themselves to start planning trans-Atlantic routes willy-nilly, and it’s unclear what effect this will have on the existing relationships.

But if they had a partner in whom they owned a stake, and that partner had a logical trans-Atlantic hub, that would be a much more solid relationship. Now from LH’s point of view, B6′s market value is distressed, so $300 million could buy for LH a partner with a hub in JFK, and a partner in which they have ownership and which cannot simply change allegiance in a few years’ time. That’s simply too good a deal for them to pass up, no matter what the relationship with UA or US is like.

Remember that although traffic between the US and Europe is *a* significant part of UA’s and US’s business, it is probably *the* single most significant part of LH’s business. The partnership with UA and US help LH’s TATL business, but this investment is just another way to help the business. I don’t see it as any more of a shot at UA than a new round of new non-stops from Europe to the US.

Regarding shifts in Star Alliance itself, I don’t see Star taking into the alliance an airline that has no premium cabins (however nice coach may be), and Star needs a major US airline as a partner just as much as UA needs Star.

Sort of related, do you see US leaving *A (regardless of any moves by LH, UA, B6, etc) in the near future? It sounds as though you see that as a possibility.

United, on the other hand, has all their eggs in one basket. They are tied very closely to Star as one of the founding members, and would be in real trouble without the alliance (unless someone else bought them and brought them into another alliance). Who is left for them to align with if they are out of Star? Nobody. That’s why I think they’re more in danger here.

I read you every day. Enjoy your blog a great deal. My initial thoughts are somewhat in line with yours. I think it’s great for B6 and LH. I don’t think this is a big slap at UA. I think this is a way for LH and possibly in the future STAR to get into JFK.

US is at LGA but limited to smaller markets and Shuttle cities. EWR is a spoke for UA and US. B6 could give LH many more beyond possibilities from JFK, especially as B6 adds spokes.

What do you think? Am I off base? Are AA and DL too big at JFK for this to be possible?

Being married to a JetBlue employee, I have a major interest in this development, and I think you are so dead-on. I’ve forwarded to friends who were panicked for us thinking this meant the end of JetBlue (I wonder if this is how people who don’t know the ins and outs of airline ownership and partnerships are reading this).

I’m hoping there’s some easy passriding to Europe in my future!

On the issue of United, I don’t fly them anywhere near often, but I’m disgusted at the lumbering directionless mass that it is. Admittedly they’ve made progress in the past several years, but the airline is moving in so many different directions: P.S., Ted, and everything else that I still have no idea what is going on over there..