Star Alliance Eyes Expansion in Asia

The current 14 members of leading global airline network Star Alliance, headed by Deutsche Lufthansa AG, plan to forge still closer economic ties and attract new members, in particular in Asia, in a bid to extend their lead over the competition and combat the ongoing industry crisis.

Polish airline LOT is expected to be joined by Korean airline Asiana in becoming a new member of the Star Alliance before the end of the year, Lufthansa chief executive Jürgen Weber said in Frankfurt at an event marking Star Alliance's fifth anniversary.

In the medium term, an inclusion of Air China was also under consideration, he added.

Following the bankruptcy of Australia's Ansett and an inclusion of LOT, Asiana and Air China, the alliance would consist of 17 airlines, further extending its lead over rival organizations Oneworld, headed by British Airways, SkyTeam, which includes Air France, and Wings, led by KLM.

Weber stressed there was no limit to the number of airlines that could join Star Alliance but the network had no ambitions of becoming "the United Nations of the skies".

China, which Weber said was set to become one of the world's biggest aviation markets, represented the biggest geographical gap in the network. Thus Star Alliance was keen to push ahead with plans to sign up Air China, he said.

The African market was of lesser interest, Weber said, but he added that Lufthansa's partner South African Airways might join the alliance in the medium term.

Industry experts have forecast more movement in airline alliances in the near future. At present, European airlines such as the newly created Swiss, Ireland's Aer Lingus, Spanair and Air Portugal were still seeking to join a network. Without the backing of a major alliance, most airlines would find it difficult to survive international competition in the long term, they said.

The 14 existing members of the Star Alliance, meanwhile, plan to forge still closer economic ties, for example in the procurement of computer technology and by harmonizing their electronic information systems. "The potential has not been exhausted by far," said Star Alliance chief Jann Albrecht.

But Albrecht dismissed suggestions of including a budget airline in the network. "The Star Alliance is a network of the world's leading scheduled airlines. It has nothing to do with low-cost airlines, which fly from point to point," he said.

Albrecht said the Star Alliance had weathered the aviation crisis following the Sept. 11 attacks better than the competition. The combined passenger numbers of its member airlines fell by 6-8% last year. In 2000, Star Alliance airlines carried a total 305.8 million passengers, compared with Oneworld's 200 million.