Turkish Airlines CEO sees potential for closer ties with Lufthansa
London
TURKISH Airlines said it may strengthen its relationship with Star Alliance partner Deutsche Lufthansa AG in a move that could help the German carrier stem a shift in market share to fast-growing rivals in the Persian Gulf.
"There is potential Turkish and Lufthansa could become closer," chief executive officer Temel Kotil said in an interview.
"It's the strongest carrier in northern Europe, and we're the strongest carrier in southern Europe," he added.
Asked if the pair could merge he said "it's too early to make a comment".
Lufthansa rose as much as 6.6 per cent in Frankfurt, the biggest gain on the benchmark DAX Index, which was down 2 per cent.
The airlines previously sought to strengthen their relationship in 2012, a foray that fizzled out a year later when Lufthansa capped passenger rewards on Turkish Air code-share flights to Germany, saying that it saw little benefit in closer ties.
The two companies are already bound together in the Star grouping and in charter-flight venture SunExpress.
Lufthansa said in March it would use SunExpress pilots on new long-haul operations under its expanding Eurowings discount brand.
"We can aim for more," Mr Kotil said, adding that he has a "relationship" both with Lufthansa and its CEO Carsten Spohr.
Partnerships with airlines including Lufthansa and Poland's LOT remain key even as Turkish Airlines builds its Istanbul base into a global hub with an eye to the success of Gulf operators Dubai-Emirates, Qatar Airways Ltd and Abu Dhabi's Etihad Airways PJCS, Mr Kotil said.
"We're strong, but we're just 2 per cent of worldwide aviation, a small baby," the CEO said of his company, which plans to almost double the size of its fleet to 450 jets by 2023. "We need the partnership with Lufthansa, we need partnerships with other airlines."
Lufthansa spokesman Andreas Bartels said SunExpress is an example of the "good partnership" between the two carriers, with the long-haul flights commencing in November.
CEO Mr Spohr said the Cologne-based company's 2015 goal of achieving an adjusted operating profit above 1.5 billion euros (S$2.4 billion) is within sight after the "best summer ever". The comments to Reuters TV were confirmed by Mr Bartels.
Lufthansa shares traded 6 per cent higher at 11.57 euros as at 1.40 pm in Frankfurt, paring a drop this year to 16 per cent and valuing the company at 5.35 billion euros.
Turkish Airlines stock was priced 0.5 per cent higher at 7.77 liras.
A recently agreed deal with LOT will also "reinforce trunk routes" between Poland and Turkey, Mr Kotil said.
Turkish Air once explored a bid for the Warsaw-based carrier, before ending talks in 2011 because of European Union rules barring majority ownership from outside the political bloc. BLOOMBERG
