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American Out of Lufthansa Talks, Leaving United for Partnership

October 1, 1993

LONDON (AP) _ United Airlines and Lufthansa German Airlines are preparing to announce they are forming a partnership to fly passengers across the Atlantic Ocean, industry sources said today.

United and Lufthansa are expected to announce their new marketing arrangement at a press conference on Monday, the sources said.

The two airlines would share reservation codes on trans-Atlantic flights, an arrangement that amounts to giving them more prominent shelf space in the airline supermarket - computerized reservation systems.

American Airlines had also been negotiating with Lufthansa about a partnership, but had dropped out of the picture, the sources said.

Neither Lufthansa nor United would confirm the arrangement today. A Lufthansa spokesman in London said only that Monday’s news conference would concern a code-sharing arrangement in North America.

Gerd Leidinger, another Lufthansa spokesman, said an agreement would be signed Monday in Frankfurt and then made public at a news conference.

A flight connecting between two airlines typically is relegated to the lower end of the list of available flights on travel agents’ computers, making it less likely to get a booking. But by sharing reservation codes, a connecting flight appears as one airline, giving it more prominent display.

Travelers, worried about making connections and keeping their luggage, are sometimes wary of changing airlines, particularly on international trips. Airlines in code-sharing agreements typically take steps to coordinate their schedules and sometimes move their gates closer at hub airports.

Code-sharing deals have become more popular in recent years as airlines try to expand their global reach without forming outright mergers with other carriers.

A code-sharing arrangement between United and Lufthansa could pose a competitive threat to Delta Air Lines, which operates the old Pan American World Airways hub in Frankfurt.

Delta’s arrival nearly two years ago was an unwelcome development for Lufthansa, because the Atlanta-based Delta has a much more extensive route structure in the huge U.S. market than Pan Am had enjoyed, giving it a big advantage in picking up passengers from small- and medium-sized cities that don’t have international flights.

The United-Lufthansa move comes at a time when major international carriers are scrambling to find marketing partners so they can have access to passengers from cities they do not serve.

A United-Lufthansa partnership would be able to attract passengers from hundreds of cities served by United in America, while picking up other people from Lufthansa’s German destinations and other foreign cities it serves.

Several other U.S. European partnerships have been announced, including:

-British Airways’ purchase of a stake in USAir, along with a code-sharing agreement.

-Continental Airlines’ marketing deal with Air France.

-KLM Royal Dutch Airlines’ deal with Northwest Airlines.

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