Transatlantic alliance between Lufthansa, SAS and United Airlines approved by EU

The alliance between Lufthansa, Scandinavian Airlines System (SAS) and United Airlines is the first of the EU/US airline alliances examined by the EU competition authority to receive official approval.

The official announcement made today by the European Commission thus gives a clear signal with regard to competition. "This decision has groundbreaking significance for the aviation sector," Lufthansa chairman and CEO Jürgen Weber said. "The EU Commission has acknowledged that alliances have clear benefits for the customer and are not an obstacle to competition. This decision will strengthen our international competitiveness. Above all, it provides legal stability and a secure planning framework and means that customers can continue to rely on a consumer-friendly alliance based on a large route network with well-coordinated connecting flights and short flight times," he added.

The approval by the EU Commission carries certain caveats, which were also contained in earlier intra-European alliance procedures. For example, Lufthansa and United Airlines must each give up one pair of slots (i.e. take-off and landing rights) per day to new competitors on routes to Chicago, Los Angeles and San Francisco, and up to two pairs of slots for flights to Washington, provided that the slots cannot be allocated via regular procedures. "These conditions are acceptable because they will not create any disadvantages for our customers or jeopardise our financial success," Weber added.

Lufthansa and United Airlines have collaborated since 1994 and operate code-share flights between Germany and the United States. Lufthansa and SAS Scandinavian Airlines began cooperating in 1996 as part of a strategic alliance and also offer code-share flights. The collaboration between Lufthansa and SAS was approved by the EU Commission in 1996. In the same year the US authorities approved the triple alliance between LH, SAS and United, while in 1998 the EU Commission threatened to impose draconian con-ditions, which would have required the airlines to relinquish 108 slots in Frankfurt.

After numerous hearings and negotiations, which continued into 2002, the partner airlines have now succeeded in convincing the Commission of the consumer benefits offered by the alliance and in reaching a solution that allows for fair competition.