Lufthansa Buys Stake in Brussels Airlines, Looks at Alitalia

Alitalia, Brussels Airlines, Lufthansa, Mergers/Finance

“The Germans marched into Brussels today as they discussed further cooperation with the Italians.”

I can’t say I ever thought that statement would be looked upon favorably, but that’s exactly what we’re seeing now. Yesterday, Lufthansa purchased a 45% stake in Brussels Airlines and they continue to talk about rescuing Alitalia. This would be good news for both those airlines and for Star Alliance, but the other alliances aren’t going to be so happy. If you have miles with SkyTeam or on American, you’ll want to watch closely.

First, let’s look at the Brussels Airlines deal. You may not have even heard of Brussels, but you probably knew the name Sabena. That airline, one of the oldest in the world, failed earlier this decade. From its ashes, Brussels Airlines was created but in a slimmed down form. After being combined with the floundering Virgin Express, Brussels now focuses on flights within Europe and down to former Belgian colonies in Africa. They currently codeshare with American on US flights, but that’s likely to be coming to an end.

Lufthansa will take 45% of the airline immediately with the opportunity to buy the rest of it by 2011. The airline will operate similar to the way Swiss does. Brussels will remain a separate brand with its own headquarters. It’s safe to assume that the airline will join Star Alliance and will ditch American. Actually, we know that Brussels will join Star Alliance. Lufthansa chief Wolfgang Mayrhuber said, “Belgium and Germany as well as the Star Alliance member-airlines will profit from the merger.”

So if you have American miles and you want to fly Brussels, you might want to book soon. Nothing has been announced and they’ll likely give some notice before the partnership ends, but it’s going to happen. Just be ready.

Meanwhile, Alitalia continues to sink deeper into the abyss. The Alitalia unions incredibly would rather all lose their jobs than cut their wages and lose some jobs. So, they won’t agree to the restructuring and the previous coalition has walked away for now. So what does PM Berlusconi do? He looks to Lufthansa, calling them an “ideal partner.”

Yeah, ok. So if you’re a SkyTeam mileage earner, Alitalia could end up leaving, but I’d be more concerned that they cease to exist instead. Don’t book them until (if) this situation is resolved.

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7 comments on “Lufthansa Buys Stake in Brussels Airlines, Looks at Alitalia

  1. I really do hope at this point that Alitalia fails and shuts down. The recovery deal sounds like a bad one all around and rewarding the antics of these particular unions isn’t doing anybody any good.

  2. Alitalia’s unions are betting on the likelihood that the Italian government will (yet again) bail out the Airline, like they have done again and again and again in the past. It is not like this type of brinkmanship is unique to the airline industry in Italy…

  3. I love the bit being reported in Reuters about Berlusconni telling French President Sarkozy that he wants to see a business partnership between Alitalia and Air France. That guy just doesn’t get it.

  4. I hope the Germans do a better job in the passenger airline business than they did in the U.S. air cargo business. They took Airborne Express from a 17% share to a 3% share in a mere five years.

  5. Alitalia is the WORST airline ever; all personel act like idiots; they forgot all luggages in Rome, of the entire flight!! luky I am still alive; they never check the airplane prior take off; Please do yourself a favor: DO NOT FLY this company!

  6. After 45 years working for Alitalia at JFK, who helped Lufhansa get started here, (then called Idlewild in about 1956), Lufthansa would be the best to take over Alitalia. Lufthansa started flights to USA after Alitalia, then called, LAI, Linea Aerea Italiane. I was offered a managerial position with LH, but refused it, because I visioned Alitalia’s future to be one of the biggest airlines in the world, because Italy was one of the top tourist country in the world. Who would want to go to Germany on a vacation, for, I believed, many obvious reasons. Needless to say, within one year, I was borrowing equipment from LH. And, within a few years, LH left AZ in the dust. LH will straighten out AZ, because, they look for good, experience people, from all nationalities to manage their company. Alitalia mostly transferred their management from Italy to other countries to run their foreign offices, which was their biggest mistake that caused their ultimate demise.

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