Lufthansa has a history of investing in airlines to bolster feeder traffic and extend its sphere of influence. It owns European regional airlines Air Dolomiti and Lufthansa CityLine, as well as the Swiss International Air Line. Lufthansa also holds a 49% stake in Eurowings, a 30% stake in BMI, and a 13% stake in Luxair. Lufthansa has recently been shopping for other European airlines, considering ailing Alitalia and Iberia, but only at the right price. With U.S. skies about to open, a weak U.S. dollar, and a depressed JetBlue stock price, a JetBlue investment makes perfect sense for Lufthansa.
Lufthansa also faces additional competition from Virgin Atlantic Airlines, which owns 23% of recently launched Virgin America, an affiliate which will certainly provide feeder traffic for its North Atlantic routes at JFK and other international gateways.
With the federally mandated flight caps just imposed at JFK and Newark, Lufthansa also wants its JetBlue relationship to help assure its own survival at JFK. With 80% of all European departures concentrated in a six hour time slot from 4 p.m. to 10 p.m., this is one of the busiest times at JFK and these European flights are likely to be affected. While long haul international flights generally operate within a narrow time window, JetBlue's domestic departures may be spread out more evenly over the course of the day and thus less likely to be affected by flight restrictions.
Many frequent fliers may wonder if Lufthansa's JetBlue investment is the beginning of a new trend of European investment in U.S. airlines or if we might someday see JetBlue become the first low-cost, discount airline to join the Star Alliance.
With a weak U.S. dollar and a battle for European air supremacy it is difficult to imagine that Air France/KLM or British Airways will sit idly by and allow a major competitor to gain a leg up in the U.S. market without contemplating a counter move. But there's no reason to invest in airlines already in your alliance, and Lufthansa may have already picked off the best non-alliance affiliated U.S. airline for feeder traffic.
An AirTran relationship might appeal to a oneworld or Star Alliance airline wanting to get a foothold in SkyTeam's Delta hub, or a Frontier deal could be attractive to a oneworld or SkyTeam airline wishing to invade the Star Alliance United Airlines hub in Denver, but these and other arrangements with smaller low-cost airlines don't offer much international traffic potential compared with New York. Southwest is by far the largest U.S. airline not affiliated with an alliance, but Southwest is a problematic feeder-traffic partner because so much of its operation is splintered by point to point rather than hub flying.
With many possibilities and equally many questions it is impossible to predict what will happen next as this European battle for air supremacy plays out in the U.S. But as is usually the case when airlines compete, fliers are poised to benefit in the short term, as Lufthansa's JetBlue investment should afford more choices and lower prices for air travel across the pond.
Send David your feedback: David Grossman is a veteran business traveler and former airline industry executive. He writes a column every other week on topics of interest and concern to business travelers. E-mail him at firstname.lastname@example.org.