By Leithen Francis in Shanghai

Star Alliance expects Shanghai Airlines will join the Lufthansa-led grouping in about one year and that Beijing-based Air China will also join the alliance next year.

Shanghai Airlines and Star Alliance held a ceremony in Shanghai today in which the carrier formally accepted an invitation to join the alliance.

Once an airline is formally invited it normally takes about 12 months for it to complete the process and formally join, says Star Alliance chief executive Jaan Albrecht (pictured below at the alliance's chief executive board press conference in Montreal in December last year). He says the process involves completing around 40 minimum requirements.

Star Alliance Albrecht W445
© Star Alliance

Albrecht also said during the ceremony “we are quite sure we will be back in China in a few weeks” to hold another ceremony to formally invite Air China to join the alliance.

It has taken Air China longer to get to the point where it can accept such an invitation because it is China’s flag carrier and as a consequence it needs more formal approval from the Civil Aviation Authority of China, says Albrecht.

Having both Shanghai Airlines and Air China is important because Star Alliance is following a “two hub strategy in China”, says Albrecht.

Star Alliance also wanted to announce Shanghai Airlines’ intention to join Star Alliance this week to make it clear now to the Shanghai Airport Authority that Star Alliance needs to have member carriers located together, says Albrecht. Shanghai Pudong International Airport is building a second terminal, which is due to open in 2008.

“We understand they [the Shanghai Airport Authority] will be ready to make an announcement on space allocation in the summer of 2006,” says Albrecht. He says Star Alliance in the coming weeks will be meeting with the Shanghai Airport Authority to discuss the new terminal. Star Alliance wants gates for its member carriers to be located in close proximity so passengers can transit more easily.

Being in the new terminal is important because the new terminal can handle the Airbus A380 plus the building promises to allow for easier connections between international and domestic flights, adds Albrecht.

Shanghai Airlines is primarily a domestic carrier but wanted to join Star Alliance because it allows it to expand internationally and capitalise on Shanghai’s growing status as an international hub, says Shanghai Airlines chairman Zhou Chi.

He says Shanghai Airlines chose Star Alliance over other alliances partly because Star Alliance has a large international network. Shanghai Airlines already codeshares with three Star Alliance carriers – All Nippon Airways, Lufthansa and United Airlines – and by doing so it reaches three major markets, namely Japan, the USA and Europe, says Zhou.

He declines to say which other Star Alliance carriers it hopes to sign codeshare agreements with this year. But senior executives at Thai Airways International have already stated publicly the Thai carrier is now negotiating a codeshare deal with Shanghai Airlines.

Another prospective codeshare partner is Star Alliance member Air New Zealand, which is preparing to launch an Auckland-Shanghai service later this year.

Placing its code on services offered by Star Alliance member carriers will allow Shanghai Airlines to quickly expand internationally, Zhou says. The carrier currently lacks the aircraft to operate long-haul passenger services to destinations such as the USA so instead it is codesharing on United’s services. It also has no passenger services of its own to Europe but codeshares with Lufthansa.

Zhou says the carrier is looking at operating its Boeing 767-300ERs to Europe but its major international expansion of passenger services will wait until 2008, when it starts taking delivery of the Boeing 787s it has on order.

Source: Flight International