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Topic: LH & TK Merger In The Making?
Username: ota1
Posted 2012-11-03 13:06:11 and read 16228 times.

According to the report posted below, Turkish Prime Minister Erdogan and German Chancellor Merkel have agreed to put TK and LH under "joint management".

Quote:
Erdogan said he had agreed to a proposal by German Chancellor Angela Merkel to establish "joint management" of the two carriers.

"During my visit to Germany, Merkel made this proposal: 'let's put Lufthansa and Turkish Airlines under joint management'. I said okay," Erdogan said in a speech to his ruling AK Party.

"This is currently among our projects and God willing we can, and will, take this joint step with Turkish Airlines and Lufthansa," he said.

Interestingly LH is not a state owned company, so if Angela Merkel made such an proposal I wonder how she was thinking it might work.

Nevertheless I think TK could indeed be LH's best option to counter the EY's alliance with AF and QR's alliance with BA.


Read the entire report here: reuters.com

Topic: RE: LH & TK Merger In The Making?
Username: by738
Posted 2012-11-03 13:35:44 and read 16029 times.

Can't see that happening. LH never really do that well cooperating with other airlines

Topic: RE: LH & TK Merger In The Making?
Username: ASA
Posted 2012-11-03 14:20:51 and read 15693 times.

Quoting ota1 (Thread starter):
Nevertheless I think TK could indeed be LH's best option to counter the EY's alliance with AF and QR's alliance with BA.

Aren't LH and TK already in an alliance similar to the ones you point out?  

LH & TK ... Star Alliance
BA & QR ... One World
AF & EY ... Skyteam(?)

So why need to merge if you have an alliance already ... there are so many options (e.g., increased code-sharing, revenue sharing, metal neutral routes, etc) before these two behemoths need to start thinking about a merger. Would the respective governmental regulations even allow a merger?

Topic: RE: LH & TK Merger In The Making?
Username: leftyboarder
Posted 2012-11-03 15:31:43 and read 15129 times.

Quoting ASA (Reply 2):
Quoting ota1 (Thread starter):
Nevertheless I think TK could indeed be LH's best option to counter the EY's alliance with AF and QR's alliance with BA.

Aren't LH and TK already in an alliance similar to the ones you point out?

LH & TK ... Star Alliance
BA & QR ... One World
AF & EY ... Skyteam(?)

So why need to merge if you have an alliance already ... there are so many options (e.g., increased code-sharing, revenue sharing, metal neutral routes, etc) before these two behemoths need to start thinking about a merger. Would the respective governmental regulations even allow a merger?

Indeed the regulations would not allow that. Not for the EU, not for Turkey. In addition, I don't think that TK would give up its advantage back to LH, which used to own most intercontinental traffic from Turkey until recently.

Quoting by738 (Reply 1):
Can't see that happening. LH never really do that well cooperating with other airlines

Neither do I. In fact, I think both leaders are simply blowing hot air.

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-03 15:54:59 and read 14800 times.

I think the term "merger" is too strong and the wrong one.

Instead what I could see is:

1) Turkish government still has its 49% remaining stake in TK which it eventually plans to sell off. LH Group would be a welcome investor for a portion of this.
2) TK is invited to join the Air Canada-United-Lufthansa Atlantic++ alliance within and alliance. With TKs continued growth, LH Group has definitely seen North Atlantic traffic being stolen by TK. Inviting them to join the JV would benefit the parties.
3) In similar light, TK and the IST hub has also caused traffic shifts going East. A JV covering Middle East/Africa/Far East could be beneficial
4) TK Miles & Smiles is combined into LH Miles & More. TK was already invited to do this as part of the Star membership and could make more sense now as part of broader cooperation with LH. At the very least I would expect TK M&S to be aligned closer to LH M&M if a partnership evolves.
5) Cooperation between subsidiaries - LH Technik & TK Technic, IT, ground handling etc..

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Topic: RE: LH & TK Merger In The Making?
Username: capri
Posted 2012-11-03 17:23:05 and read 13833 times.

I don't see German type management thinking with Turkish thinking on the same table, bye bye EU!!!!!!, it will be another Otto-German Empire, that's a new way to put USA, Russia, China, India on their toes.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-04 00:07:52 and read 11479 times.

LOL, what a joke.

Mrs. Merkel has no power whatsoever to "put LH and TK under joint managemrent. Mr, Erdogan might have, but not in Germany.

LH is a privately owned company whose shares are traded at the Frankfurt stock exchange. Foreign ownership is limited to 49%, any mergers or changes must be OK'd by the owners at the annual general meeting or a special AGM.

The cartel office of Germany, Turkey and the EU as well as the US would have a saying in approval, but only after the owners have decided in a majority vote.

LH actually is a threat to LH like EK and QR. They offer businss class fares form germany to - for instance the Middle east, which are less than 59% of what LH offers. They might co-operate in an alliance, anything else is a brain fart.

Topic: RE: LH & TK Merger In The Making?
Username: ankaraflyjet
Posted 2012-11-04 00:59:46 and read 11020 times.

Turkey is the only significant growing market for civil aviation in Europe as well as TK is one of the few profitable and positively expanding airline in the world. Given Turkey's new role in the region, Turkey's continous economic growth TK has a bright future ahead. The new airport in Istanbul with 6 runways and 150 Million pax capacity per annum is going to cause Istanbul being the largets hub between London and Dubai.

The other airports in Turkey ESB, ADB, AYT etc. are also very modern state of the art facilities and ahead of its competitors in many aspects. This is an advantage for Turkey's late economic development compared to Europe that most of the airports are aging and/or lack the potential to grow physically due to a variety of reasons.

The way TK is growing is alarming for LH definitely because TK is not only causing a threat in wider continental European network but already ahead in Africa and the Middle East and in CIS region. The next wave will see TK expanding in North America and even if *A is there, TK will be able to compete against LH-UA-AC Trans-Atlantic partnership and will steal a great deal of pax from the alliance on the North America sector. So the move by LH makes sense because eventually either UA and AC will force LH to alter the partnership or Germany will be lost from the map for the traffic that is between USA/Canada and Turkey.

In fact Turkey is geographically better located than Germany to offer transit services to Middle East, Africa, CIS, India etc. The operating costs are also cheaper by TK than LH. You can reach over 120 destinations from IST with a 737 in Europe, Middle East, Africa and CIS so naturally has better opex than major European carriers like BA, LH etc. LH cannot compete with Turkey's prices for the same service and TK also gives better service as far as customer surveys are concerned.

Yes LH is not a state enterprise but Merkel and LH senior management are not ruling out the potential in TK and instead of competing they are trying to establish a partnership on a win win case I hope. It is very logical but I think LH needs TK more than TK needs LH.

All roads lead to Rome meant the capital of East Roman Empire "Constantinople", not Rome in Italy !!!

Topic: RE: LH & TK Merger In The Making?
Username: pilotaydin
Posted 2012-11-04 01:57:15 and read 10053 times.

I wouldn't dismiss the idea of a merger folks...we are growing like crazy AND the EU is not doing so well, we are already cooperating with LH through STAR, so it's not a far fetched idea that LH might try to convince their stock owners of such a good idea...there are still many many many plans here at TK that we are working on, only going to get bigger and better...

Topic: RE: LH & TK Merger In The Making?
Username: TK787
Posted 2012-11-04 04:02:58 and read 9312 times.

Quoting LAXintl (Reply 4):

Totally agree with you, no merger but more cooperation. It is a brand Turkey built and would not want to share.

Topic: RE: LH & TK Merger In The Making?
Username: Turkish350XWB
Posted 2012-11-04 04:16:53 and read 9141 times.

Quoting ankaraflyjet (Reply 7):
The new airport in Istanbul with 6 runways and 150 Million pax capacity per annum is going to cause Istanbul being the largets hub between London and Dubai.

The largest hub between Dubai and Atlanta i would say.

Quoting ankaraflyjet (Reply 7):
In fact Turkey is geographically better located than Germany to offer transit services to Middle East, Africa, CIS, India etc. The operating costs are also cheaper by TK than LH. You can reach over 120 destinations from IST with a 737 in Europe, Middle East, Africa and CIS

This is the key of success for TK which it is playing quite well. And it's advantage over the MEB3. It can cover the 4 markets you mentioned with NB aircraft and high frequency, offering connections between these 4 markets. Serving with such a high frequency (and it will become more dense with the new airport), almost every longhaul flight gets feeded very well. And i believe this advantage is unique and will make TK the biggest airline in Europe and the new IST airport the biggest one in Europe - a giant hub among ATL PEK and DXB.

Topic: RE: LH & TK Merger In The Making?
Username: Semaex
Posted 2012-11-04 04:49:25 and read 8783 times.

Quoting PanHAM (Reply 6):
Mrs. Merkel has no power whatsoever to "put LH and TK under joint managemrent. Mr, Erdogan might have, but not in Germany.

Absolutely, so this is basically a no-news. But for the heck of it let's still talk about it:

Quoting LAXintl (Reply 4):
Turkish government still has its 49% remaining stake in TK which it eventually plans to sell off. LH Group would be a welcome investor for a portion of this.

I don't think LH has the will and means right now to go off buying other airlines again. The days of Mayrhuber are over, now Franz is actively dismissing partners which do not benefit the network. LH needs to settle down first before they can spend billions buying stocks again.

Quoting LAXintl (Reply 4):
LH Group has definitely seen North Atlantic traffic being stolen by TK. Inviting them to join the JV would benefit the parties.

I don't think getting TK into the boat is going to stop this tendeny all of a sudden. This JV might have a lot of upsides, but the downsides are massive too. There's quite a huge gap in the way both airlines are run. The culture, the government involvement, even the metal.

Quoting LAXintl (Reply 4):
Cooperation between subsidiaries - LH Technik & TK Technic, IT, ground handling etc..

This is definitely a bonus of having a large network of cooperating airlines, and it would aid LH and TK greatly. But this is far less of a cooperationg than Merkel and Erdogan are talking about.

Quoting ankaraflyjet (Reply 7):
In fact Turkey is geographically better located than Germany to offer transit services to Middle East, Africa, CIS, India etc.

Talking Big Pond traffic, I disagree with you on all points. Travelling NA-CIS via IST just like NA-Africa is complete backtracking, and ME and India don't take much from one another whether going through Central Europe or Asia Minor. No doubt IST has a huge advantage when it comes to Africa-CIS, -ME and -Asia, but there you have EK fighting TK.

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-04 09:46:00 and read 5923 times.

Lufthansa representative says everything is possible with Turkish Airlines.

Lufthansa Says All Is Possible in Talks with Turkish Airlines
http://www.businessweek.com/news/201...-after-turkish-merger-talks-report

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Topic: RE: LH & TK Merger In The Making?
Username: ElPistolero
Posted 2012-11-04 10:56:00 and read 5132 times.

Quoting ankaraflyjet (Reply 7):
The next wave will see TK expanding in North America and even if *A is there, TK will be able to compete against LH-UA-AC Trans-Atlantic partnership and will steal a great deal of pax from the alliance on the North America sector.

If that's the case, what will TK gain by entering the JV other than sharing its profits with airlines from whom it would otherwise have been stealing pax (and profiting while doing it)?

Quoting LAXintl (Reply 4):
2) TK is invited to join the Air Canada-United-Lufthansa Atlantic++ alliance within and alliance. With TKs continued growth, LH Group has definitely seen North Atlantic traffic being stolen by TK. Inviting them to join the JV would benefit the parties.

Same question. Why? How would this work ? Unless LH buys TK outright a la OS and LX, TK will simply be replacing LH metal on some routes, which might not go down so well with LH stakeholders. TK is gaining market share, so why would it want to start sharing its profits with airlines that it is taking market share from?

Its primary strength is its ability to undercut AC-UA-LH on costs and provide a better-value-for money proposition in the bargain. Sharing its profits would amount to a cost, wouldn't it? In any event, as I understand it, TK has an agreement with AC to feed its operations out of YYZ. I imagine it has a similar interlining agreement in the US?

Quoting LAXintl (Reply 4):
TK Miles & Smiles is combined into LH Miles & More.

Why? LH Miles and More is aimed at premium pax. Its terrible for Y pax. TK, on the other hand, is aggressively pursuing Y pax and I imagine M&S *G is still earnable for pax who fly solely in Y. Why, then, would they try to turn it into the sordid mess that M&M is and lose a degree of loyalty in the process. If anything, I imagine TK has a lot to gain from AC's decision to align Aeroplan with M&M over the last few months. I can see a lot of folk who do N America -South Asia 2-3 times a year (like myself) switch to TK and M&S to avoid the 50% or less mile earnings that AC and LH afford on those routes in Y. From a frequent flyer perspective, making M&S ape M&M would not make much business sense, given the focus on Y pax.

Quoting PanHAM (Reply 6):
LH actually is a threat to LH like EK and QR. They offer businss class fares form germany to - for instance the Middle east, which are less than 59% of what LH offers. They might co-operate in an alliance, anything else is a brain fart.

I believe this as well. TK would have to restrict its expansion ( I don't think they're that risk averse, given the investment in 30-40 new WBs) for this to work. Besides AC and UA aren't going to start serving IST the way they serve FRA anytime soon, so this merger wouldn't necessarily be great for TK.

Quoting ankaraflyjet (Reply 7):
So the move by LH makes sense because eventually either UA and AC will force LH to alter the partnership or Germany will be lost from the map for the traffic that is between USA/Canada and Turkey

Does it? AC and UA aren't going to switch to IST instead of FRA. Well, UA might increase the service - its independent enough. In the AC-LH relationship, its pretty clear who wears the pants, so don't expect any maple leafs to turn up in IST. I don't see why TK would want to share N. America traffic with LH if it can siphon it away profitably on its own.

Quoting pilotaydin (Reply 8):
I wouldn't dismiss the idea of a merger folks...we are growing like crazy AND the EU is not doing so well, we are already cooperating with LH through STAR, so it's not a far fetched idea that LH might try to convince their stock owners of such a good idea...there are still many many many plans here at TK that we are working on, only going to get bigger and better...

Alright, but what does TK gain? As I see it, TK has the money, the fleet and, soon, the infrastructure, to make a dent in the market. To top it off, its also aggressive in the Y market, a market that LH still hasn't quite figured out. Any merger would put some of those "many many many plans" that would help TK "to get bigger and bigger". Its not like LH is going to handover longhaul pax bound for North America or east of Turkey to TK on a platter.

AC/LH, for example, works because there is one clear dominant partner and one partner that relies very heavily on the dominant partner. The relationship dynamic is very clear. In a TK/LH relationship, one may have a claim at being the dominant carrier (LH), but the other is not in any way reliant on it - in fact, it's made a pretty go of challenging the dominant one every step of the way so far.

Would it be a good investment for LH? Yes, if it can put a lid on TK's expansion. Don't know how well that would go down with TK.

Quoting Semaex (Reply 11):

I don't think LH has the will and means right now to go off buying other airlines again.

I daresay a 49% stake in TK is probably not going to come cheap either. Its profitable, expanding, very much on the up - not quite the same as buying cash-strapped/semi-defunct airlines like SN.

Quoting Semaex (Reply 11):
Travelling NA-CIS via IST just like NA-Africa is complete backtracking, and ME and India don't take much from one another whether going through Central Europe or Asia Minor.

If the price is right, people will backtrack. TK has the ability to put a dent in prices and still churn a profit, which is something that LH etc don't like.

All of which is to say that while I don't think a merger is unlikely, I'm not entirely convinced that it is mutually beneficial. LH would benefit more, I think, if only because it can then control one of its main threats on the North Atlantic. But then again, TK isn't in dire straits or incapable of churning profits (unlike, say, AC), so why would it enter this agreement? Any gain in revenue through the revenue management a merger would bring (higher prices, cooperation on capacity etc) may not necessarily be greater than simply undercutting and siphoning traffic away from LH onto TK metal instead. The latter would allow for more flexibility for expansion as well. What would TK gain from a merger. A little more J traffic? Its doing quite well with mostly Y traffic for the time being - and I m not sure that the influx of J traffic (if there is any) would be better than just continuing with Y focused expansion alone.

Topic: RE: LH & TK Merger In The Making?
Username: leftyboarder
Posted 2012-11-04 11:56:48 and read 4540 times.

Quoting ElPistolero (Reply 13):

Perfectly put. I would rather see TK link up with an airline of smaller magnitude (say EY for example) than be brought to a halt by the slow behemoth LH is. No benefits whatsoever for TK and no regulatory infrastructure either. Simply pointless.

Topic: RE: LH & TK Merger In The Making?
Username: B777LRF
Posted 2012-11-04 12:48:47 and read 4046 times.

The company I work for once had a Joint Venture with LH. It didn't go very well, mainly because there seems to be this institutional dysfunction with LH, in that they think they not only invented commercial aviation and air cargo, they are also by far the best at it and won't listen to opposing points of view on any subject. This makes cooperation quite difficult, as I'm sure you can imagine, and eventually It got to the point where a very, very senior person at my company wrote a very, very senior person at LH, quoting the Oxford Dictionary definition of the term "Joint". Predictably the LH person had both a total sense of humor failure and completely failed to get the point. When the JV finally ended, a collective sigh of relief emanating from our HQ could be heard from a very considerable distance indeed

If TK gets in to bed with LH it will spell disaster for both; the "we rule" mentality of LH merged with the headstrong and proud ditto of TK ... I'll give it a month before it starts blowing up.

Topic: RE: LH & TK Merger In The Making?
Username: Viscount724
Posted 2012-11-04 13:04:48 and read 3873 times.

Quoting ElPistolero (Reply 13):
n the AC-LH relationship, its pretty clear who wears the pants, so don't expect any maple leafs to turn up in IST.
Quoting ElPistolero (Reply 13):
AC/LH, for example, works because there is one clear dominant partner and one partner that relies very heavily on the dominant partner. The relationship dynamic is very clear.

Why do you consider LH the dominant partner on Canada-Germany when AC has more than twice as many flights a week with their own metal and more than 140% more seats a week in each direction than LH? AC also currently operates 6 nonstop routes Canada-Germany while LH only operates their own metal on 3.

Current schedules:

AC
YYC-FRA 7 x week A333 - total 1855 seats
YYZ-FRA 7 x week B77W - total 2443 seats
YYZ-FRA 7 x week B763 - total 1477 seats
YOW-FRA 5 x week B763 - total 1055 seats
YUL-FRA 7 x week A333 - total 1855 seats
YYZ-MUC 7 x week B763 - total 1477 seats
Total AC seats per week each direction - 10,162

LH
YVR-FRA 7 x A343 - total 1547 seats
YYZ-FRA 7 x A343 - total 1547 seats
YUL-MUC 5 x A333 - total 1105 seats
Total LH seats per week each direction - 4,199

Topic: RE: LH & TK Merger In The Making?
Username: copenhagenboy
Posted 2012-11-04 13:16:22 and read 3748 times.

I don't see any kind of merger between the two airlines.
But if you take of the dark glasses, I don't see why they should not cooperate more on some routes and even JV.
LH has already mentioned that BKK does not work to well on their own metal.

Topic: RE: LH & TK Merger In The Making?
Username: musapapaya
Posted 2012-11-04 14:44:33 and read 3481 times.

Quoting B777LRF (Reply 15):
The company I work for once had a Joint Venture with LH. It didn't go very well, mainly because there seems to be this institutional dysfunction with LH, in that they think they not only invented commercial aviation and air cargo, they are also by far the best at it and won't listen to opposing points of view on any subject. This makes cooperation quite difficult, as I'm sure you can imagine, and eventually It got to the point where a very, very senior person at my company wrote a very, very senior person at LH, quoting the Oxford Dictionary definition of the term "Joint". Predictably the LH person had both a total sense of humor failure and completely failed to get the point. When the JV finally ended, a collective sigh of relief emanating from our HQ could be heard from a very considerable distance indeed

If TK gets in to bed with LH it will spell disaster for both; the "we rule" mentality of LH merged with the headstrong and proud ditto of TK ... I'll give it a month before it starts blowing up.

Is this not the same as the gulf airlines, the 'we rule' concept?

Topic: RE: LH & TK Merger In The Making?
Username: ElPistolero
Posted 2012-11-04 15:49:50 and read 3326 times.

Quoting Viscount724 (Reply 16):

Why do you consider LH the dominant partner on Canada-Germany when AC has more than twice as many flights a week with their own metal and more than 140% more seats a week in each direction than LH? AC also currently operates 6 nonstop routes Canada-Germany while LH only operates their own metal on 3.

Current schedules:

AC
YYC-FRA 7 x week A333 - total 1855 seats
YYZ-FRA 7 x week B77W - total 2443 seats
YYZ-FRA 7 x week B763 - total 1477 seats
YOW-FRA 5 x week B763 - total 1055 seats
YUL-FRA 7 x week A333 - total 1855 seats
YYZ-MUC 7 x week B763 - total 1477 seats
Total AC seats per week each direction - 10,162

LH
YVR-FRA 7 x A343 - total 1547 seats
YYZ-FRA 7 x A343 - total 1547 seats
YUL-MUC 5 x A333 - total 1105 seats
Total LH seats per week each direction - 4,199

I could be my usual shady self and simply point to the fact that LH had to issue an official denial of its involvement when AC waged a particularly high-profile battle against a certain airline in 2010  . I could also point out that one particular route that became particularly famous during that row would not have been possible without LH's 'cooperation'. You've listed it above - YOW-FRA - with its O&D lot of what - 10%? I didn't realise they only ran it 5 weekly - always thought it was daily. But that aside, a lot of that AC metal flying into FRA carries traffic that isn't going to FRA - and a lot of those routes wouldn't exist without cooperation with LH. Given how crucial TATL operations are for AC' revenue, AC has a lot more riding on this relationship than LH.

So why do I say LH is the dominant partner? The answer is in the stats you provide above.How many of the 10,162 passengers that travel to FRA on AC stay in FRA? (interesting that you didn't mention the other LH carriers that serve Canada - LX and OS). If LH pulls the plug on this relationship, or worse yet, starts putting its own metal on those routes, will that be good for AC?

That isn't to say that LH isn't getting anything out of it. Airfares out of Canada aren't exactly cheap, and by cooperating with AC, instead of competing with it, it is getting a decent amount of revenue and it can free up planes to use elsewhere. But if push came to shove and LH and AC disagreed over something fundamental, it would be much easier for LH to discard AC (by putting its own aircraft on some of those routes - God knows it can) than it would be for AC to discard LH. For one, LH has enough fiscal flexibility to undercut AC on prices and gain market share, if it really wanted to.

As such, I can't see a similar relationship between TK and LH, because TK would never be as reliant on LH as AC is (at least right now - maybe things will get better for AC with the LCC). LH won't be able to dictate terms. The seat numbers you've posted above don't really mean much other than to show how much AC long haul capacity is dedicated to FRA, and make one wonder what would happen if LH stopped playing nice. LH could always recapture that traffic onto its own metal (though it might make a little less moneyh doing so). What would AC do? Where would it fly those aircraft instead? How would it keep a grip on markets further east? Would it fly to IST instead?  
Quoting B777LRF (Reply 15):
The company I work for once had a Joint Venture with LH. It didn't go very well, mainly because there seems to be this institutional dysfunction with LH, in that they think they not only invented commercial aviation and air cargo, they are also by far the best at it and won't listen to opposing points of view on any subject.

As a former employee of a very prominent German multinational, I agree that the German approach can sometimes be based on some misguided sense of 'we're always right', even when they're not. That said, the Americans aren't much better. But yes, the company I worked for had a very "my way or the highway" philosophy, which might work with some airlines that are struggling, but not with airlines that are profitable and ambitious.

Quoting musapapaya (Reply 18):
Is this not the same as the gulf airlines, the 'we rule' concept?

Yes, it is the same. Any airline that is in a position to dictate the terms of a merger would be foolish not to.

In the LH-TK situation, this would get very tricky, since one airline is planning to expand in a fairly well-served EU-US market, which means that in the absence of stimulating a whole new market a la India/China, it will be siphoning traffic off others - including LH. Its expansion depends on its ability to siphon off this traffic. Or else, we won't see it expanding at all, since this would invariably amout to replacing someone else's metal on longhaul, and I dont think the other partners are keen on that.

Topic: RE: LH & TK Merger In The Making?
Username: Viscount724
Posted 2012-11-04 16:52:17 and read 3214 times.

Quoting ElPistolero (Reply 19):
YOW-FRA - with its O&D lot of what - 10%? I didn't realise they only ran it 5 weekly - always thought it was daily.

YOW-FRA is daily in the summer, 5 x week in the winter. YOW-LHR is daily year-round.

Topic: RE: LH & TK Merger In The Making?
Username: ankaraflyjet
Posted 2012-11-04 21:23:01 and read 2987 times.

Quoting ElPistolero (Reply 19):

LH will start YVR MUC in Q2 2013 and they will test the market to see if this can be a round year service. This their second try on this route.

TK is willing to expand in Canada too but needs to alter the bilateral. YYZ is operating 5 weekly with over 95% load factor and is highly profitable. This will turn into a daily serivce in late December.

TK is pushing for YUL IST and aslo will push for YVR IST as soon as the bilateral makes it possible. TK already entered into a codeshare with AC on the domestic flights in Canada ex-YYZ but the application has not yet started due to regulatory body approval expected in a few weeks.

Canada poses a great market for TK and has a great future given the amount of traffic between Canada and Middle East, Asia and Africa that AC is not in the position to serve itself. Due to limitations imposed by Canada on EK, QR etc. TK is a great option and addition to service between Cnada and Iran, CIS, Africa, Eastern Europe, India etc. Last but not least the amount of Turkish mgarnts in Canada also is on a steady rise as well as the business between the two countires in a record high so this is another factor to help boost Canada Turkey traffic overall.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-04 22:42:39 and read 2892 times.

This still hasn't made the news in Germany. Looks like someone is pushing this and this someone is not Lufthansa.

Now, it is highly unusual, that Mrs, Merkel interferes with the business of top 30 or other companies in Germany. It is not her job. Since LH and it's board can handle and manage their affairs very well themselves, it is likely unlikely that they have asked Mutti (Mother) for assistance.

Mr. Erdogan on the other side, may have personal or national interests and may have put this issue on the taqble, on behalf of TK. Since Mrs Merkel is a polite and seasoned politician, she may have answered that she will discuss this with the LH board.

Now, the government of Germany cannot interfere in any way except expressing pious wishes. Mr. Erdogan can, but his influence in germany is yet rather dim.

TK and LH have completely different corporate climate which will not go together. The laws of the countries are very different,m something which will not be changed in the distant future..

Turkey is not in the European Union and will not be for decades to come. LH could buy a minority share in TK, but that's the limit. Besides being partners in * alliance. Besides that we have 2 players in different playgrouns, one EU single market carrier and one third country carrier whose home base has some affiliations with the EU and enjoys ample traffic rights, supported by huge ethnic traffic especially in Germany.

It cannot be ruled out that some cooperation on top of the existing alliance partnership will materialize. esüpecially sinc eLH seems to be out of options after QR and EY have become unavailable for some sort of cooperation.

Here, TK is a natural choice and the only one left.

But, will all due respect to the Turkish economy and the fast development of the national economy, it has yet to prove it's sustainability and a hub needs more than transit traffic. It needs local traffic to support, in business class and in economy. Dubai shows the role model, EK would not be what it is without the simoultaneous development of an attractive business and residential location, generating lots of high yield local traffic.

Topic: RE: LH & TK Merger In The Making?
Username: UALWN
Posted 2012-11-05 03:46:32 and read 2491 times.

More information and analysis can be found here:

http://www.bloomberg.com/news/2012-1...s-rivals-look-east.html?cmpid=yhoo

Topic: RE: LH & TK Merger In The Making?
Username: leftyboarder
Posted 2012-11-05 03:56:15 and read 2493 times.

I reiterate; this would be the mistake of century for TK. It has a chance to rival LH. So why submit to it a la LX (a failed/reborn airline) or OS (also a failed airline)? If anything, in 10 years TK might be acquiring a minority stake in LH. If it makes investment sense by then of course.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 04:14:13 and read 2614 times.

Still not on the agenda anywhere in Germany. i checked Focus, Spiegel, Welt, FAZ, no one has this.

Latest news about LH is that the mediation is about to fail, but that's another topic.

Quoting leftyboarder (Reply 24):
t has a chance to rival LH.

TK rivals LH already. I checked prices over the weekend for 2 destinations I am possibly travelling to in the coming weeks, FRA TLV and FRA MCT. TLV on Lh and LX is about e 2600- to 3000 oin biz, MCT I did not check. TK sells biz to TLV for € 1175,00 and to MCT for about € 1800. TK serves each and every small airport in Germany, supported by ethnic traffic and the biz class prices are obviously fill-up.

TK has obviously a lower cost base, but 50%??? How much help from the government is there? LH is choked by the government with CO2 and passenger tax as well as night curfews and by the unions who have lunatic demands.


.

Quoting ElPistolero (Reply 19):
As a former employee of a very prominent German multinational, I agree that the German approach can sometimes be based on some misguided sense of 'we're always right', even when they're not.

May be LH hasn't invented aviation but they have improved it. Whoever went through the traineeship to become a "Luftverkehrskaufmann", which today is combined with a study at the European Business School, has a solid knowledge about everythoing in aviation. Not too many carriers in the world offer that.

Topic: RE: LH & TK Merger In The Making?
Username: tripple7
Posted 2012-11-05 05:02:22 and read 2599 times.

Quoting PanHAM (Reply 25):

Still not on the agenda anywhere in Germany. i checked Focus, Spiegel, Welt, FAZ, no one has this.

It has appeared in Dutch press today. Link only in Dutch: http://www.nu.nl/economie/2950744/na...lufthansa-en-turkish-airlines.html

Article talks about the wish of TK and LH for closer cooperation between both companies. Pretty much aligns on the views expressed in the Bloomberg article

Topic: RE: LH & TK Merger In The Making?
Username: TK787
Posted 2012-11-05 05:02:33 and read 2752 times.

Quoting PanHAM (Reply 22):
Looks like someone is pushing this and this someone is not Lufthansa.

This push is awesome for the stock price of TK, it nearly doubled in the last year. It is getting more and more expensive to buy that 49%. On the other hand, the government shares once sold will cover budget deficits, or used elsewhere.

Quoting PanHAM (Reply 25):
TK serves each and every small airport in Germany,

IIRC, only 13 cities in Germany, TK serves also 10 cities in Russia.

Quoting PanHAM (Reply 25):
How much help from the government is there?

TK definitely gets government help when it comes to Bilaterals, slots at IST, NO STRIKE law for airline employees...

Quoting PanHAM (Reply 22):
it has yet to prove it's sustainability and a hub needs more than transit traffic.

TK has a huge domestic market, serving a population of 80mil pax at 35 domestic airports. Besides, the transit traffic is going towards 30% of all TK pax, up from almost nothing 10 years ago. It is a blessing to be a nonEU airline, not to deal with like likes of Ryanair and Easyjet.

Topic: RE: LH & TK Merger In The Making?
Username: airbazar
Posted 2012-11-05 05:08:46 and read 2751 times.

Quoting ankaraflyjet (Reply 7):
Turkey is the only significant growing market for civil aviation in Europe as well as TK is one of the few profitable and positively expanding airline in the world.

Lets not get too crazy here   That statement couldn't be further from the truth. Just about every market in Europe is growing. Just look at Ryanair's lattest numbers (fares up 6%, demand up 7%). In addition there are far more expanding and profitable airlines in the World than there are money losing and shrinking ones. With world wide passenger demand growing at double digit figures annualy, you'd have to be a really bad airline to not be expanding.

Quoting ankaraflyjet (Reply 7):
In fact Turkey is geographically better located than Germany to offer transit services to Middle East, Africa, CIS, India etc.

That's too wide of a brush. There are some markets which Turkey is well positioned and some which Germany is well positioned. This is a very interesting article, with a very nice picture:
http://www.amadeus.com/blog/08/05/ne...ook-on-worldwide-passenger-demand/
Surprise! Despite all the naysayers and an economic crisis on both sides of the Alantic, N.America-Europe is still one of the fastest growing markes. I wouldn't say that Turkey is better positioned for Europe-Asia either. For any traffic to/from Western Europe, FRA/MUC are just as well positioned. As you can see, there aren't that many fast growing markets for which Turkey is well positioned but there are markets where TK can be one of many competitors.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 05:09:02 and read 2764 times.

Quoting TK787 (Reply 27):
IIRC, only 13 cities in Germany, TK serves also 10 cities in Russia.

That's what I said, each and every small airport in Germany.

Topic: RE: LH & TK Merger In The Making?
Username: oldeuropean
Posted 2012-11-05 05:34:46 and read 2751 times.

Quoting PanHAM (Reply 25):
Still not on the agenda anywhere in Germany. i checked Focus, Spiegel, Welt, FAZ, no one has this.

Here we are:

http://www.spiegel.de/wirtschaft/unt...mit-turkish-airlines-a-865352.html

Lufthansa are talking about a cooperation but a merger would be "pure speculation".

Topic: RE: LH & TK Merger In The Making?
Username: capri
Posted 2012-11-05 05:58:27 and read 2739 times.

Quoting leftyboarder (Reply 24):
Quoting leftyboarder (Reply 24):
I reiterate; this would be the mistake of century for TK. It has a chance to rival LH. So why submit to it a la LX (a failed/reborn airline) or OS (also a failed airline)? If anything, in 10 years TK might be acquiring a minority stake in LH. If it makes investment sense by then of course.

Couldn't agree no more, if only they get the new airport going asap

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 06:11:18 and read 2741 times.

Quoting oldeuropean (Reply 30):
Lufthansa are talking about a cooperation but a merger would be "pure speculation".

Welt and FAZ still don't bring the news. Co-operatiuon yes, they have a joint venture with Sun express since years which seems to work well. But a merger is beyond means for many reasons.

Besides, what does Mrs Merkel have to do with all this? LH is a privately owned company, the state has to keep out of it, if they want to help LH abolish the stupid single sided taxes.

Topic: RE: LH & TK Merger In The Making?
Username: airbazar
Posted 2012-11-05 06:27:33 and read 2751 times.

Quoting PanHAM (Reply 32):
Besides, what does Mrs Merkel have to do with all this? LH is a privately owned company, the state has to keep out of it, if they want to help LH abolish the stupid single sided taxes.

Most airlines, and especialy an airline like LH whose business is primarily cross boarder relies heavily on government support and intervention in order to be able to operate in a foreign country. The idea that government does not or should not intervene is a myth and naive at best. No global airline, no matter what country it is from, would be able to operate and survive without government intervention. The basic act of a bilateral agreement between 2 coutries requires government intervention.

Topic: RE: LH & TK Merger In The Making?
Username: leftyboarder
Posted 2012-11-05 06:44:50 and read 2740 times.

Quoting airbazar (Reply 33):
The basic act of a bilateral agreement between 2 coutries requires government intervention.

Until a truly global open-skies of course   By then we would be living on Mars anyway.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 07:05:09 and read 2744 times.

Quoting airbazar (Reply 33):
Most airlines, and especialy an airline like LH whose business is primarily cross boarder relies heavily on government

gee, thanks I didn't know that.
 

Now, seriously, the government is in charge to get the treaties ratified, the Traffic Ministry has an office supervising all this and all the legal stuff required and the LBA, which is our equivalent to the FAA supervises the operational part of the airlines, maintenance etc. . So, the framework enabling private companies to operate is certainly government business.

The government however, has no business whatsoever interfering in the commercial dealings of private companies. The fact that except Spiegel no other newspaper picked up the story tells me that LH is rather reluctand about this whole matter and the interpretation of Bloomberg is based on a Prime Minister who needs the PR and is high on testosterone anyhow.

If he wants a Turkish Luefthansa someone should show him the finger. If the 2 companies agree on a closer cooperation than they have already through star alliance, code sharing and whatever else, fine. That's between th 2 companies.





Quoting leftyboarder (Reply 34):
Until a truly global open-skies of course By then we would be living on Mars anyway.

Be careful with such predictions. Mr. Ghersky was lucky too.

Global open skies would be a nightmare, it would destroy a very successful facilitation system called IATA.

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-05 07:05:55 and read 2745 times.

Quoting PanHAM (Reply 22):
But, will all due respect to the Turkish economy and the fast development of the national economy, it has yet to prove it's sustainability and a hub needs more than transit traffic. It needs local traffic to support, in business class and in economy. Dubai shows the role model, EK would not be what it is without the simoultaneous development of an attractive business and residential location, generating lots of high yield local traffic.

Your comments reflect the lack of awareness about the situation in Turkey.

Turkey and Istanbul are much larger O&D markets then Dubai.

Istanbul - already in 2011 generated some 50mil passengers - of which only about 12% (6.2mil) were international to international transfers.

Dubai on the other hand also almost had 50mil passengers in 2011, but with virtually 50% of this being transit.
EK has even stated with added capacity (A380s) it expects its transfer business to grow closer to 60% of traffic carried via DXB.

Quoting TK787 (Reply 27):
This push is awesome for the stock price of TK, it nearly doubled in the last year. It is getting more and more expensive to buy that 49%. On the other hand, the government shares once sold will cover budget deficits, or used elsewhere.

The valuation of any remaining state share of THY does not need to be based on the current stock price. Matter of fact I virtually guarantee it wont, and instead will be offered at a substantial discount as part of the states privatizing push if a single party shows up and willing to purchase a large shareholding.
Stock price would be only meaningful of shares were released for open purchase on the market - not something the government has indicated it would do at this moment.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 07:30:41 and read 2739 times.

Quoting LAXintl (Reply 36):
Your comments reflect the lack of awareness about the situation in Turkey.

The question is, and I highlighted that in my comment, the quality of that O&D traffic. I also mentioned the simoultaneous development of an attractive business and residential location at DXB, all that basically from dust.

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-05 07:47:27 and read 2753 times.

Quoting PanHAM (Reply 37):
The question is, and I highlighted that in my comment, the quality of that O&D traffic. I also mentioned the simoultaneous development of an attractive business and residential location at DXB, all that basically from dust.

Turkey is a home market of 75mil. Dubai Emirate is 2.2mil.

There is plenty of "quality" O&D with Turkey and Istanbul in particular. (as example Istanbul happens to be home 4th most billionaires in the world per Forbes magazine)

If anything, if you want to talk about "quality" go to Dubai airport and sit around and you'll see that a large portion of that O&D is South Asian labor making trips back and forth, not the idealized jet-set crowd travelling between their London mansion and desire to do business of dip their toes in the warm Gulf waters.

Turkey is a huge and most importantly diverse economy, with a growing and educated population base, and as result has become a very important travel market. The IMF says that by 2023, Turkey will rise from #17 to one of the Top-10 global economies.

Certainly not something airlines or companies in general can ignore.

=

[Edited 2012-11-05 07:59:04]

Topic: RE: LH & TK Merger In The Making?
Username: airbazar
Posted 2012-11-05 08:25:40 and read 2758 times.

Quoting PanHAM (Reply 35):
The government however, has no business whatsoever interfering in the commercial dealings of private companies.

Absolutely. So when Angela Merkle went to China last August to announce a $3.5bn Airbus order, that wasn't "interfering in the commercial dealings of a private company." 
We all wish the government didn't interfere, or support, or whatever semantics one wants to use but that is far from the reality when it comes to International trade. International business and government interference go hand-in-hand. A government may ask and in some cases even force a company to do something, in order to get something else in return. It happens all the time.

Topic: RE: LH & TK Merger In The Making?
Username: PanHAM
Posted 2012-11-05 08:59:57 and read 2749 times.

Quoting airbazar (Reply 39):
"interfering in the commercial dealings of a private company."

well, selling a product in approval by the manufacturer is a completely different case. Such visits always have an entourage of business people.

the way this here was brought was in a way that not only a foreign politician interfered with a domestic matter but also our chancellor mumbling some kind of approval. That cannot be done without the consent of the managment and the owners.

Thhat is a completely different matter.

Topic: RE: LH & TK Merger In The Making?
Username: B777LRF
Posted 2012-11-05 10:39:28 and read 2731 times.

Quoting musapapaya (Reply 18):
Is this not the same as the gulf airlines, the 'we rule' concept?

It has yet to transpire what becomes of the JV between QF and EK, which is the closest you'll get to what we had with LH. But so far no Gulf carrier has, with the exception of a CEO who thinks his farts smells from roses, reached the level of arrogance displayed by upper LH management.

Quoting ElPistolero (Reply 19):
Yes, it is the same. Any airline that is in a position to dictate the terms of a merger would be foolish not to.

If you want the merger to fail then, yes, go ahead and dictate terms (because you can) that the other side will find unpalatable. We are, however, not talking about a merger but a Joint Venture. Trying to dictate terms for that is even more foolish than for a merger.

Quoting PanHAM (Reply 37):

The question is, and I highlighted that in my comment, the quality of that O&D traffic.

There are around 17 million people in Istanbul alone, more than in all of the UAE combined. More than 10.000 families, who are millionaires in USD, call Istanbul their home, far outweighing any of the Emirates. Turkey has a vast and diverse economy, a large part of which is industry - heavy industry producing stuff out of iron and steel. Outside oil and gas, the UAE has nothing to offer in terms of industry. Turkey is a huge exporter of manufactured goods; Dubai is but a transit stop for other people's stuff. A very large part of EK's O&D traffic is transporting poor migrant workers to and from the subcontinent. A very large part of TKs O&D traffic is transporting expats of varying wealth, and locals of varying wealth, to and from all over the world. If it's "quality O&D" you're after, I suggest looking at EK might not be a very good idea, while TK doesn't look half bad, particularly with the loyalty it enjoys from both diaspora and locals.

80% of all traffic in DXB will be transit, or so the EK strategy goes. TK could be double the size of EK and not even break 50% in IST.

Some castles are made of sand. Some are even built in the sand.

[Edited 2012-11-05 10:41:09]

[Edited 2012-11-05 10:45:09]

Topic: RE: LH & TK Merger In The Making?
Username: ota1
Posted 2012-11-05 11:02:34 and read 2768 times.

Here are some more information (according to Financial Times Germany) on what LH and TK are negotiating at the moment:


- Cross-shareholding (though no full merger)
- A joint venture and revenue sharing (like A++ and the joint venture between LH and NH)
- Cooperation of the companies' IT, maintenance and catering branches
- New jointly owned and operated carrier(s) (like SunExpress)

Sorry, source in German only right now:

www.forexpros.de

[Edited 2012-11-05 11:04:32]

Topic: RE: LH & TK Merger In The Making?
Username: leftyboarder
Posted 2012-11-05 11:30:05 and read 2767 times.

Quoting ota1 (Reply 42):
Here are some more information (according to Financial Times Germany) on what LH and TK are negotiating at the moment:


- Cross-shareholding (though no full merger)
- A joint venture and revenue sharing (like A++ and the joint venture between LH and NH)
- Cooperation of the companies' IT, maintenance and catering branches
- New jointly owned and operated carrier(s) (like SunExpress)

Sorry, source in German only right now:

www.forexpros.de

Of those, a JV on Germany-Turkey routes (which would be a hardsell due to monopoly situation) and some onward connections to NA on LH or MidEast on TK could be doable. So are joint maintenance/IT/catering businesses. Cross-shareholding gives access to confidential info since they might gain access to each others' boards so not sure if that is a good idea. Full merger? Hell no.

Topic: RE: LH & TK Merger In The Making?
Username: ytz
Posted 2012-11-05 11:58:35 and read 2772 times.

Love TK. And I don't see this happening. The Turks would have to be the world's worst businessmen to give up this much power to LH.

Topic: RE: LH & TK Merger In The Making?
Username: kmz
Posted 2012-11-06 00:56:34 and read 2749 times.

so maybe Christoph Franz meant TK and not a Gulf Carrier when he said "we need to get our house in order" prior negotiating with another airline....

Reuters

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-19 09:18:06 and read 2696 times.

Financial Times today has a story about ongoing talks between LH-TK.

Some of the options being discussed include
o Bringing TK into the Atlantic++ JV with Air Canada/United
o Investing into each other via share swap

Story also mentions one of the driving interest in a TK-LH partnership is boosting long-haul business which continues to be under threat from the Gulf carriers.

http://www.ft.com/intl/cms/s/0/04163...8-2fe1-11e2-ae7d-00144feabdc0.html


Interesting fact - apparently Turkey is the largest foreign aviation market for EU carriers now outside of the US !

Topic: RE: LH & TK Merger In The Making?
Username: LAXintl
Posted 2012-11-30 10:12:48 and read 2480 times.

A new story about a LH-TK linkup.


Basically says, the linkup is crucial for LH in the long run to fight off thriving and lower cost Gulf and Asian airlines which continue to steal historic traffic flow from European airlines. TK allows LH to diversify with a broader network without investing new routes and aircraft itself. For TK the benefit would be access to larger and wealthy pool of passengers while getting an image boost from LH reputation for quality and safety.

http://finance.yahoo.com/news/luftha...ould-stay-long-haul-133851086.html


In other related news, the Turkish Finance Minister confirmed the government was examining possibilities for equity investments.


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