Lufthansa proposes two-hub plan and Star role for Alitalia

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Lufthansa estimates it could achieve over €500 million ($733 million) in synergies from a tie-up with Alitalia, under which it would seek to integrate the Italian airline into Star Alliance and pursue dual hubs at Rome and Milan.

Italian investor group Compagnia Aerea Italiana (CAI) is combining Alitalia with former local rival Air One, and is aiming to select a foreign partner for the revamped operation by the end of this year.

Speaking during an interview with Italian newspaper Il Messaggero, Lufthansa board member and CAI negotiations representative Holger Hatty said: "If 'New Alitalia' picks Lufthansa, it will create synergies in excess of €500 million."

He rebuffs suggestion that the German Star Alliance member has set a 45% minimum capital entry level and stresses that Alitalia would be an equal and autonomous partner, rather than have a junior role. Lufthansa has submitted a 30-page vision of a multi-hub and multi-brand network to CAI.

While Alitalia had backed away from its costly two-hub strategy in order to concentrate on Rome Fiumicino, the Lufthansa proposal would reinstate Milan Malpensa as a hub.

"We want to have two hubs: Fiumicino and Malpensa. This is our proven philosophy, demonstrated by Frankfurt, Munich, Zurich and Vienna," Hatty tells the newspaper. "The two will have equal strength and standing."

He says Rome would focus on leisure traffic and Milan will be used as a business hub, adding that Alitalia could potentially derive more than €100 million in benefits by giving up its SkyTeam membership and joining Star Alliance. "We are ready to make major efforts to bring Alitalia into Star Alliance," he concludes.

Lufthansa is also investing in Austrian Airlines, Brussels Airlines and has recently set up a Milan-based division of its own, Lufthansa Italia.

A Lufthansa spokesman says: "It is important to have Lufthansa Italia there. It gives us security of being in the Italian market with our own set-up either way, through Lufthansa Italia or Alitalia. We have not detailed what one means for the other this is something we would have to decide if it comes to this."

Other contenders for an Alitalia partnership include British Airways and Air France-KLM.