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Photo provided by Matthias Liebich/Lufthansa

Lufthansa and Singapore Announce Joint Venture

Just yesterday, Singapore Airlines and Lufthansa have announced a strategic joint venture for all flights between Singapore and several countries in Europe. This new agreement will be applied to all aircraft operated by both airlines, as well as Singapore subsidiary SilkAir and Lufthansa subsidiaries Swiss and Austrian Airlines.

“We are very pleased to have reached agreement for this extensive partnership, which will bring about significant benefits to consumers through enhanced connections and more codeshare destinations” stated Singapore Airlines CEO Mr Goh Choon Phong. “Singapore Airlines has had longstanding ties to Lufthansa, which is an ideal partner with an excellent network and strong customer focus. This agreement deepens ties with the wider Lufthansa Group, providing a solid foundation for numerous commercial co-operation opportunities.”

The two carriers have struggled over the last several years, facing steep competition from both premium gulf carriers such as Emirates, Etihad and Qatar as well low-cost carriers such as AirAsia and EasyJet. According to Mohshin Aziz, an Associate Director at Maybank Investment Bank, Singapore’s long-haul routes have been consistently losing money since 2009. This is a major concern especially for Singapore as the majority of its routes are long-haul, leaving its short-haul to be offered by Singapore partners SilkAir and Tiger Air.

However, the two airlines hope the joint-venture will provide not only greater efficiencies, but also benefits for customers. The partnership, if approved through the necessary regulatory stages, will allow flights to be scheduled closer together for easier connections since customers can be placed on codeshare flights with either carrier. This will also provide more back-up options in the instance that a flight is delayed or cancelled.

Carsten Spohr, the CEO of Deutsche Lufthansa AG, went to say “We can look back already on a long and fruitful partnership with Singapore Airlines. And we’re now intensifying this close collaboration between two world-leading premium air carriers with a new joint venture that is in the best interests of all our customers, in Europe and in Southeast Asia. Because by working even closer together, we can both offer even better connections and even better services.”

Joe Pesek
Joe Pesek
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