LUFTHANSA SPREADS ITS WINGS, LINKS WITH SOUTH AFRICAN AIRWAYS

LUFTHANSA SPREADS ITS WINGS, LINKS WITH SOUTH AFRICAN AIRWAYS

Lufthansa plans to extend its global reach by forming an alliance with South African Airways that will include passenger and cargo services, according to Wilhelm Althen, president of Lufthansa Cargo Airlines.

By coordinating flight schedules, the two airlines will make it easier for passengers and shippers to make connections. The program also will link their frequent-flier programs. Details will be announced this fall, Mr. Althen said in a telephone interview Wednesday from Frankfurt.The new alliance will be the latest in a series that the German carrier has been developing over the past two years. Other partners include United Airlines, Thai Airways International and Scandinavian Airlines System.

"With these alliances, I think we're in good position to cover the

globe," Mr. Althen said, adding that the partners serve many destinations that Lufthansa does not cover with its own freighters or passenger planes.

Cooperation with its partners in cargo has been limited thus far, however, although Lufthansa is talking with all of them. Plans to develop a joint cargo hub with Thai Airways in Bangkok, for example, have been under discussion for more than a year.

"That takes some time," he said.

Mr. Althen said he is watching Federal Express Corp.'s plan to open an intra-Asia hub in the Philippines next month with great interest because of Lufthansa's 25 percent stake in DHL International Airways. DHL intends to set up its own intra-Asia hub in Manila this fall, but its plans are not as well developed as those of FedEx.

Japan Airlines owns 25 percent in DHL, and a former senior JAL executive, Mitsuo Ando, became president of DHL's Japan subsidiary on July 20.

"I'm very happy that he's with us now," Mr. Althen said, recalling that he and Mr. Ando had initiated the investments by Lufthansa and JAL in DHL.

"There will be more and more partnerships between forwarders, integrators and airlines," he predicted, adding that the SAA alliance probably will give Lufthansa enough airline partners.

On other matters, Mr. Althen said Lufthansa's worldwide tonnage growth during the first half of this year was several percentage points higher than expected. Trans-Atlantic flights in both directions have been heavily booked.

"Even with the high German mark, European exports to the U.S. are increasing," he said, adding that nations with weak currencies like Italy have had "huge export growth."

The weak dollar, on the other hand, has bolstered U.S. exports to Europe, he said.

Lufthansa has no plans for across-the-board rate increases this fall, but will adjust its prices in markets where capacity is tight, he said.

The airline is looking to increase cargo capacity for the busy fall shipping season by chartering one or two aircraft and by buying belly or maindeck space from other carriers, especially its partners, he said.

Lufthansa, which owns 17 freighters, including 10 747-200s, is not planning to buy any more cargo planes, either new or used, he said. But it will expand its fleet by one plane next year when it takes back one that it leased to Atlas Air, a Denver-based charter carrier.

It will begin taking possession of five 747 freighters from FedEx in 1998, but is no longer seeking to accelerate its takeover of those aircraft, he said.

Mr. Althen also said Lufthansa's intra-European express service is operating at close to capacity. It has 20 flights nightly in and out of Cologne, its hub for that operation. The service employs two Boeing 737 pure freighters and seven quick-change aircraft that carry passengers during the day and convert to all-cargo configuration for night operations.