Turkish - Lufthansa Potential Merger

Discussion in 'Star Alliance' started by Seacarl, Nov 4, 2012.  |  Print Topic

  1. Seacarl
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    Seacarl Gold Member

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    Bloomberg article: http://www.bloomberg.com/news/2012-...ssible-after-turkish-merger-talks-report.html

    While it's just a rumor, merger discussions are not being denied by either Turkish or Lufthansa, and Germany and Turkey have strong economic ties. TK & LH already operate a JV.

    TK has a solid product. Maybe it would bring widebodies to the FRA-IST route which would be nice. LH supervising the technical operations would be an added plus. If the IST-USA flights are added to ATI JV, it would mean more code-sharing and more flight options.
     
  2. Jimgotkp
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    Maybe TK will start releasing C awards from IST-U.S. and back. :)
     
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  3. Mirror74

    Mirror74 Gold Member

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    Fat chance... :eek:
     
  4. Seacarl
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    Sure would be nice
    Why are they stingy with award space?
     
  5. Jimgotkp
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    They are probably doing well selling the seats.
     
  6. Seacarl
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    But it devalues the award program to have no aspirational awards
    They have a good C product, particularly on the 77W
     
  7. Jimgotkp
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    It's a similar situation to that of NZ and them not releasing C award space on their LHR-LAX route, no? Great C product and all..
     
  8. Lufthansa Flyer
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    No way in HELL. Merkel and Erdogan open their mouths and we have a merger? Another example of politicians talking about what they don't understand.
     
  9. Lufthansa Flyer
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    I doubt anything will happen until SCORE is completed. TK would be such a bad addition to the fleet. I can only imagine the welfare state of their employee contracts/commitments.
     
  10. Seacarl
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    On the one hand, the companies could have issued public denials, which they didn't. On the other hand, politicians don't usually propose such things if they aren't attempting to help or influence it. Merkel said she didn't want to the EADS-BAE merger as proposed and that killed it.
     
  11. TRAVELSIG
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    Interesting and recurring rumour. There could be some strategic benefits however I suspect the integration would prove to be quite difficult.
     
  12. Seacarl
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    LH owns Swiss, Brussels and Austrian and somehow has made that work. Beyond merging the mileage program and some procurement functions, I think they are run fairly independently. I imagine a similar model would be in place here. I have no idea how AF-KLM do it, but those cultures are pretty different too.
     
  13. Lufthansa Flyer
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    I'm thinking the Euro politicians (as well as our american ones) have far more bigger things to worry about and arranging mergers. Maybe they just don't realize it.
     
  14. Lufthansa Flyer
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    "culture shock" in both directions would be an understatement.
     
  15. Seacarl
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    They sure do have bigger things to worry about, but maybe micromanaging private companies is more fun
     
  16. Seacarl
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    I'm still curious how AF & KLM do it. Or the German and French halves of Airbus
     
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  17. TRAVELSIG
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    I am not sure OS nor SN are working all that well and the restructuring that took place in OS in the last 12 months was quite the drastic re-organization.

    Let's not forget the success story of BMI.

    LX is essentially a separate company at the moment.

    AF/KL are not that different in terms of culture- and the integration process is quite a few years in now with still more than the odd difficulty.
     
  18. Seacarl
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    Current LH Group CEO was once LX CEO, I think (Franz)
    All the European airilnes have a cost problem. OS seems to be making some progress on that - better than LH fared when they wanted to change their FA agreements.
    BMI was clearly a disaster. It didn't seem like LH took an active role in developing the BMI strategy or making it effectively feed *A. It seemed more hands-off, and when they couldn't figure out a business model, LH walked away at a huge loss. A bit strange.
     
  19. TRAVELSIG
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    Correct that LH Group CEO was formerly CEO of LX. To date, however LX remains quite separate in their operations.

    I think even more than a cost problem European airlines have a revenue problem. And it does not apply to all airlines. If you notice Emirates is currently recruiting 4000 flight attendants in Europe including 400 from Italy and their year on year traffic is up almost 13%. Ryanair is above their profit guidance as of today.

    The revenue problem European airlines face is a split between customers choosing lower cost alternatives (i.e. Easyjet and Ryainair for short haul) and carriers offering more services and newer product on long haul premium traffic.

    It is certainly not an easy problem to solve and I don't envy the executives charged with this task.

    Cutting costs however is not the way out unless the goal is to drastically re-size the companies (like LX did following the collapse of Swissair).

    Honestly- take the shorthaul product offered in "business class" by either AFKL or Lufthansa Group and then report back on how much more you would pay for this service. The product offering is not generating value to the end user- and they are choosing to move elsewhere as a result.
     
  20. Seacarl
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    Amen to that. I have found that M-class when I select the exit row seat is better on LH's A320/A321 then being in C-class on those aircraft. TK have a nice C-class on their 738 aircraft.

    It's right that beyond the lounge access, LH really offers no more than the LCCs on short-haul routes, and so they have to price match. They should probably have a mid-haul product that is more like TK 738's for >2 hour flights. Maybe that would justify some revenue premium.

    And then call their short-haul service 1-class, all coach, with revenue management. That's really what it is.
     
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  21. LIH Prem
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    "“During our Germany trip, Merkel offered me this: ‘Let’s get Lufthansa and Turkish Airlines into joint operation,” the premier was quoted as saying by Anatolia. “I said: ‘OK. This is already among our projects and God willing our Turkish Airlines and Lufthansa can take a joint step like that.’”"


    yeah. You want to be in bed with Erdogan. Bring your own veil.


    I assume this is the article you meant to link to? http://www.bloomberg.com/news/2012-...eepen-turkish-tie-up-as-rivals-look-east.html

    -David
     
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