Lufthansa continues expansion across Europe

By Joe Brancatelli

INTERNATIONAL AFFAIRS

Lufthansa Buys Austrian Airlines, Too: Lufthansa’s board of directors has approved the purchase of Austrian Airlines. Separately, Lufthansa officially launched its new Italian subsidiary, Lufthansa Italia, which will be based at Milan’s Malpensa Airport, a facility that Alitalia has all but abandoned in its rush to "save" itself. Speaking of the eternally hobbled Italian flag carrier, plans to sell the profitable parts of Alitalia to a private enterprise continue to be delayed. The deal, which will merge Air One and Alitalia into a "new" Alitalia, was supposed to be completed by December 1. The date was then pushed back until mid-December. Now the Italian government, which owns about half of the current Alitalia, has pushed the plan back to mid-January. Meanwhile, it’s worth watching Lufthansa’s emerging development (some might say dominance) as a pan-European carrier. Besides the Austrian buy and the new subsidiary in northern Italy, Lufthansa also owns Swiss International and is planning to buy Brussels Airlines, the Belgian carrier, and Bmi, the British airline.

HAWAII HIJINKS

What’s in An Name? Plenty If It’s ‘Aloha Airlines’: See if you can keep up with this series of dizzying developments in the inter-island Hawaii market. Arizona-based Mesa Air, the regional carrier, launched go! on Hawaii routes in 2006. It was promptly sued by the incumbent inter-island carriers, Hawaiian and Aloha. They claimed that Mesa misused proprietary information obtained when Mesa considered buying either or both of the Honolulu-based airlines. Mesa paid Hawaiian $52.5 million to settle that suit. Aloha Airlines folded earlier this year, but Aloha’s largest shareholder, a California investment firm named Yucaipa, bought Aloha’s lawsuit against Mesa from the bankruptcy court. Mesa last month settled that suit by agreeing to pay Yucaipa $2 million in cash and give it 10 percent of Mesa’s shares. But there is another fillip: Mesa agreed to license the Aloha name from Yucaipa. And Mesa will pay big for the name: as much as 1 percent of ticket revenues and 30 percent of Mesa’s profits on the inter-island routes. However, the re-branding rests on Yucaipa buying the Aloha name from the airline’s estate. But Aloha’s bankruptcy judge has delayed a decision on the sale of the Aloha name to Yucaipa until February. "Ittakes the term Aloha and stands it on its head," grumbled Judge Lloyd King. "How about the people whose lives were devastated [by Aloha’s bankruptcy]? Don’t they count? Is it just money?"

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