Cathay Pacific & Lufthansa Announce A New Partnership

Global airline alliances are so two decades ago. Nowadays we’re seeing these alliances deemphasized, and in the meantime we’re seeing joint ventures and individual strategic cooperations increasing in importance. After all, with how big the global alliances have gotten, there’s only so much that the airlines have in common across the board.

Well, Cathay Pacific (a member of oneworld) and Lufthansa (a member of Star Alliance) have just announced a partnership. Here’s how they’re describing it:

  • Cathay Pacific Airways, Lufthansa, Swiss and Austrian Airlines, sign code-share and frequent flyer agreement
  • Shared flights will mean numerous benefits for passengers
  • Connecting flights via Hong Kong to Australia and New Zealand under same flight number in future

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So, what does this look like in practice? Starting April 26, 2017:

  • Lufthansa, Austrian, and Swiss passengers arriving in Hong Kong (from Munich, Vienna, and Zurich), will be able to travel on Cathay Pacific codeshare flights from Hong Kong to four destinations in Australia and New Zealand (Sydney, Melbourne, Cairns, and Auckland)
  • Cathay Pacific will codeshare on 14 European flights offered by Lufthansa, Swiss, and Austrian, expanding existing connection opportunities for Cathay Pacific passengers out of Frankfurt, Dusseldorf, and Zurich
  • There will be some sort of a reciprocal frequent flyer agreement between the two airlines, though the details of that aren’t totally clear yet; I suspect the agreement will only amount to reciprocal earning on codeshare routes, and not include redemptions, earning on all routes, etc.

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Here’s what executives from both airlines had to say about this new partnership:

Ivan Chu, Chief Executive Officer Cathay Pacific Airways, said: “This new codeshare agreement will offer Cathay Pacific passengers enhanced connectivity to destinations in continental Europe through flights operated by Lufthansa, Swiss and Austrian Airlines via our gateways in Frankfurt, Dusseldorf and Zurich. At the same time, Lufthansa Group customers travelling from Europe to Southwest Pacific will have easier access to flights to Australia and New Zealand through our super hub in Hong Kong.”

Carsten Spohr, Chairman of the Executive Board and CEO of the Lufthansa Group, said: “Cathay Pacific Airways and the Lufthansa Group, two of the world’s leading aviation groups, are forming a ground-breaking partnership. I am particularly pleased because it strengthens our global network of strategic partnerships and further improves our airlines’ offering on Asian routes in the interest of our passengers. The code-share and frequent flyer agreement between Lufthansa, Austrian Airlines, Swiss International Air Lines and Cathay Pacific Airways brings advantages for the passengers of all the partners, because the airlines’ route networks complement each other perfectly. Cooperation with Cathay Pacific is another key building block in our Asia strategy and supplements existing commercial joint ventures with All Nippon Airways, Singapore Airlines and Air China and other Star Alliance partners in Asia.”

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This new partnership makes sense in terms of Lufthansa’s lack of access to Australia and New Zealand, and Cathay Pacific’s lack of partner airlines at many of their European gateways. However, on some level, the new partnership is a bit odd. Lufthansa and Singapore Airlines belong to the same alliance, and Singapore Airlines serves similar cities in Australia and New Zealand. So I suspect the relationship between the two airlines isn’t in fact as cozy as them being in the same alliance would suggest.

Both Cathay Pacific and Lufthansa seem to be more open to new codeshare partners lately:

Bottom line

With the Gulf carriers and global ultra low cost carriers changing the landscape of the industry, airlines are having to get more creative with their partnerships. This new partnership between Cathay Pacific and Lufthansa seems logical, especially given that these two carriers have been struggling quite a bit financially (more so Cathay Pacific than Lufthansa, at least in recent years).

What do you make of the new partnership between Cathay Pacific and Lufthansa?

Comments

  1. Interesting partnership on a lot of fronts … Singapore serves essentially the same SW Pacific airports that Cathay does, so it seems somebody isn’t playing nice here. Similarly, one can connect just about everywhere that Lufthansa flies out of FRA with BA out of LHR or Finnair out of HEL (where Cathay doesn’t fly, but presumably could with an A350 or even A330 if access to continental Europe is the goal). Lots of extra-alliance partnerships these days — seems to be where the world is heading in terms of working with one-off strategic partners for mutual benefit instead of within an alliance.

  2. This looks like a win for LH less so for CX. I imagine the frequent flyer agreement will be based on the codeshare routes. That is, LH will earn miles on CX flights ex-HKG onwards to Australia and NZ, whereas CX will earn a few miles on LH flights intra-Europe.

  3. CX is leaving OW to join *A, especially with the CA’s investment in CX.

    Now I just stirred the pot by speculating 🙂

  4. Hmmm… the paranoid part of me was suspicious last week of CX leaving One World given the announcement of AA buying a share of CZ even though CAN is just 80-some miles from HKG. I hope it isn’t the case

    My (Jon’s) comment on the AA/CZ thread –

    March 23, 2017 at 2:28 pm

    It makes me wonder about the future plans of CX in relation to AA and/or Oneworld.

  5. To additionally speculate, I am also concerned this could eventually impact CX’s relationship with Alaska given that AS doesn’t currently partner with anybody who is in or partners with a Star Alliance carrier.

  6. If you had the chance to create a perfect airline alliance, what would your group of airlines be?

  7. Seems like *A become less favourable for LH nowadays, anyway can’t wait to hear SQ response on this :p

  8. CX is gradually getting to the switch over point – they have partnerships with NZ, AC and now LH+LX+OS, not to mention the 20% cross-equity deal with CA.

    And if you look at CX’s North American network of YVR YYZ SFO LAX ORD JFK EWR BOS, 6 out of 8 of those are Star Alliance hubs.

  9. SQ’s A380 flights to/from London are usually filled by passengers booked on SQ, VA, VS, and AC – so I think they should be just fine. I was surprised that LH isn’t code-sharing with TG, given that not only are both Star Alliance members, but traffic from both directions are more likely to fill seats if the flight goes via Bangkok, no? I imagine BKK is also cheaper than HKG in terms of costs for the airlines, hence driving down airfares. My question isn’t why LH isn’t partnering with SQ, but why not do so with TG?

  10. I don’t think this is too much of a surprise, given the long cargo relationship between CX and LH.
    In fact, LH helped to start CX’s cargo services.

  11. These bespoke partnership/alliance is meant to lock in frequent flyers of the respective airlines to their home programme and limit the arbitrage possibilities of flying within the alliance. Personally I think it is foolish, as people will find the way or, ultimately move to a more flexible frequent flyer programme within the alliance.

  12. People that are saying CX is leaving for Star….it’s not going to happen. Just like when QF formed a deeper relationship with EK and QF was going to leave oneworld.

    Meantime, CX just announced more codeshares with AY, a fellow oneworld member.

  13. If I’m a United flyer and I fly on a Lufthansa codeshare with Cathay (which is operated by Cathay), can I still accrue miles to my United program? Thanks.

  14. I suspect CX is also hedging its future due to Brexit, since BA is their primary OW connection within Europe, they might want a larger continental EU partner to prevent the difficulty of transiting.

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