Lufthansa and South African Airways (SAA) have agreed on an alliance to co-ordinate flight schedules and examine extending the co-operation to ground handling and, possibly, aircraft overhaul and acquisition.

The deal, expected to come into effect early in 1996, ends speculation that SAA and British Airways were about to form a similar pact. The alliance raises doubts about the long-term future of SAA's code-share with American Airlines, given Lufthansa's co-operation deal with United Airlines.

Lufthansa chief executive Jurgen Weber says that SAA's relationship with American is not a hindrance for the time being, but will probably have to be reviewed.

Over the past 18 months SAA has curtailed its services to Europe, traditionally its biggest source of foreign revenue. Weber says that SAA needs a partner as it cannot adequately serve Europe and retain market strength operating only two frequencies a week to some destinations.

A series of joint Lufthansa/ SAA task groups will be set up to investigate the potential opportunities for co-operation.

"We have agreed to explore various fields within the next six months. Practically everything which could improve our situation is open for analysis, starting with network co-ordination. We will look at operations, technical, cargo, aircraft servicing, catering, ground handling, everything," he says.

Source: Flight International