Etihad May Actually Join The Star Alliance?!?

Earlier I posted about how the CEOs of Etihad and Lufthansa are meeting in Abu Dhabi tomorrow, apparently to announce some sort of expanded cooperation.

This relationship almost emerged by accident, due to their mutual connection to airberlin. However, in the meantime the two airlines have found value in working together, though they’re starting slow. As of now Etihad and Lufthansa are just codesharing on select flights between Europe, South America, and the Middle East.

As I explained, the announcement tomorrow could come in many forms, ranging anywhere from a maintenance contract to Etihad joining the Star Alliance to Etihad buying an equity stake in Lufthansa. Earlier I speculated that it would be more significant than a maintenance contract, but less significant than Etihad joining the Star Alliance, or buying an equity stake in Lufthansa.

Well, since publishing that post I’ve been hearing reliable rumors that there may be more to this than I was expecting. Rumor has it that Etihad is very close to joining the Star Alliance. That’s no guarantee that this is the announcement tomorrow, but if it isn’t, apparently it’s close to actually happening.

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Etihad joining the Star Alliance is shocking (on the surface)

I know what you’re probably thinking — “this makes no sense, this is just a silly rumor.” When I was told about this deal I couldn’t make sense of it either:

  • What happens to the Etihad Airways Partners group that Etihad has built up?
  • For all the trashing the U.S. carriers do of the Gulf carriers, is there any way United would approve Etihad joining the Star Alliance?
  • Wouldn’t this put the partnership that American has with Etihad in jeopardy, as it’s unlikely they’d parter with both American and United?
  • What happens to all the other Etihad Airways Partner airlines, like Alitalia, etc.?
  • Would Etihad just give up on airberlin, or how would this go down?

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But there’s also merit to Etihad joining a global alliance

Etihad’s James Hogan is on the way out later this year, and it’s clear that the airline wants a radical change in strategy. Etihad has invested in airberlin, Alitalia, etc., and those investments simply haven’t paid off, and it doesn’t look like things will change anytime soon. So while ditching everything they’ve built seems radical, it might not be a bad strategy.

They might also be able to balance things — perhaps airlines like Air Serbia could eventually join the Star Alliance, airberlin could be further integrated into Lufthansa, and partnerships with airlines like Jet Airways could be maintained on the side.

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Bottom line

Like I said, this caught me off guard, but I’ve heard this from two reliable sources. I can’t guarantee this is tomorrow’s announcement, but apparently it’s very close to being finalized. Of course for a deal of this scale there’s always the potential for things to fall through. And this does seem crazy — the fact that United approved this is perhaps the most surprising part, given that they have veto rights for new airlines joining the alliance. Then again, perhaps they’d rather that they’re partnering with Etihad, rather than American.

I’ll be watching tomorrow’s announcement very closely.

What do you guys make of the prospect of Etihad joining the Star Alliance?

Comments

  1. An even more interesting question, after EY joining Star, is whether EK will partner with DL in Skyteam lol

  2. As long as QR stays in One World I’m ok with this. It would be interesting to see what the redemption rates for EY via United would be if this actually happens.

  3. 130,000 United miles to go from New York to Sydney via Abu Dhabi in a First Apartment wouldn’t be a bad deal.

  4. Remember that Scott Kirby is now running UA and they have not been as vocal on the ME3 since he joined, I don’t see UA blocking this. This makes perfect sense for them, witj Gulf Carriers having to be more self sustaining it will make sense for them to join alliances. Qatar is already OneWorld and years ago EK was looking at joining *A so maybe EY is wanting to beat them to the punch. I doubt both EK and EY will be allowed to join *A. Although with theeir relationship with QF I would think EK’s first choice would be to join OneWorld but if QR could block that the only one left would be SkyTeam which is arguably the worst alliance.

    Now the big question will be if UA will consider the Residence First Class (at 140K each way) or if they will create a new award class for it.

  5. It would be something unexpected, but don’t you feel that airline alliances are losing their purpose?

    For instance, the Air Canada and Cathay Pacific deal. The AA with EY…

    Gol have DL money, but has partneship with Air Canada, Copa Airlines, Emirates….

  6. Hate to be a downer, but what are the odds that Etihad Apartments/Residence can’t be booked through partner awards, like Singapore airlines’ premium cabins?

  7. Star Alliance has very strict rules on partnering outside alliance (code sharing and JV) and Lufthansa has been one of those most active in blocking out of alliance deals. Remember Emirates to Panama City? That was scuppered when Lufty blocked Copa from code sharing on connecting feed. So if Lufthansa does want to do a major partnership, it’ll have to bring Etihad into Star.

    I can also see this working for United in providing flights to AUH that connect to EY onward to India (LH only serves two Indian cities that United doesn’t).

  8. Angela merkel wants etihad to fly all the millions of refugees directly to lufthansa frankfurt first class terminal where they can shower and smoke cigars. This will avoid long and dangerous trips from libya by sub standard boats and instead travel in the apartments and business studios. Economy of course will be for the indians.

  9. @Brad B

    Why would Etihad offer the Residence as a first class redemption? That makes absolutely no sense, especially considering they have an existing first class product in the First Apartments. They will obviously continue to offer it only to their own members for millions of points.

    A much better question is, as Ben F says, would Etihad as a member of Star Alliance follow Singapore’s lead and restrict First Apartment redemptions to their own members as well?

  10. @USBT:

    Your information is inaccurate. Copa and Emirates activated a two-way code-share agreement last year. Copa carries Emirates’ code between Panama City and Sao Paulo and PTY and Rio de Janeiro. This has been in effect since July 2016. Copa also had activated its c/s with Emirates in January 2016 so that EK would carry CM’s code between DXB and PTY, which is obviously dormant since EK has indefinitely postponed the route.

    EK cancelled Panama City because the demand for the route was weak and advanced bookings sucked. PERIOD. There was NO involvement on Lufthansa’s part whatsoever. In fact, it would be embarrassing for LH to make any claims against EK and CM given that they also had to postpone their PTY route startup 6 months because advanced bookings were bad on FRA-PTY and simultanteously converted the route to Jump.

    Please, please PLEASE do not spread false information like this without checking your facts. Hearing it through the rumor mill does not constitute authenticity. This is one of my biggest pet peeves and it does a HUGE disservice to the aviation community.

    Also, let’s dispel this notion that Lufthansa has precluded Star carriers from ever codesharing with the Gulf carriers. Emirates codeshares on other Star routes, like Thai’s service between BKK and DXB. And Emirates carries plenty of Star codeshares such as TAP, South African, etc. And Aegean, Air New Zealand, Asiana, SAS, Brussels, Turkish, TAP and Avianca + Avianca Brasil all reciprocally codeshare on Etihad, the list goes on.

  11. I could see this actually especially as joining Oneworld has appeared to benefit QR, and United has been far less vocal than DL about the ME3.

    Wonder if this will force AA and QR a bit closer, rather than their current status as “frenemies”?

  12. This is great news if it happens. So many times I have seen EY fares available that I would like to take up but because they aren’t in an Alliance I don’t bother. I’ll always keep QR as the main carrier but nice to have an option if this *A thing happens

  13. Press conference just finished.
    Summary: Lufthansa will provide catering for Etihad in 16 cities (Abu Dhabi not included).

    So much for the reliable rumours, so much for the wet dreams of *A freeloaders that got status and miles through not-so-frequent-flyer programmes, who wanted to redeem for Etihad apartments…

  14. Thank the maker! Was concerned EY would leave as an AAdvantage partner. I’m redeeming AA points for an EY First Apartment ticket when they’re released for my chosen date in barely a few weeks – I was shittin’ bricks. Sorry; shittin’ rocks 😉

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