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Wednesday, May 14, 1997 - Page updated at 12:00 AM

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5 Airlines In `Global Branding' Alliance

Bloomberg News

FRANKFURT - Lufthansa, United Airlines and three other airlines unveiled an alliance today aimed at increasing revenue through shared marketing and flights. No equity stakes were exchanged.

The alliance initially groups Germany's national carrier with UAL's United, Thai Airways International, Air Canada and Scandinavian Airlines System under the Star Alliance brand name. Brazil's Varig will join the group in October, the airlines said. Each of the carriers had extensive links with one or several of the others.

The new partnership signals further progression toward what industry executives predict will be the creation of five or six carriers worldwide that will dominate global transport.

"It is the first global branding which has such international breadth," said Charles Donald, an airline analyst with UBS in London.

Passengers of any airline in the grouping will be allowed to accumulate and redeem mileage points across its 578-city route network and use any of its 179 airport lounges worldwide.

The move comes as regulators weigh the proposed alliance between British Airways and AMR's American Airlines, which rank as Lufthansa and United's main rivals in seeking to create a unified brand to attract passengers worldwide.

Unlike the BA-American partnership, the new grouping does not pose regulatory hurdles because it doesn't envision sharing revenue or combining flights.

The partners will seek to simplify ticketing and baggage handling, offer easier connections and add complementary destinations, Air Canada Chief Executive Lamar Durrett told reporters at a Frankfurt news conference.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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