Lufthansa To Buy Stake In JetBlue

The leading German airline Lufthansa has today announced that it is to acquire just less than one fifth of the equity in JetBlue, the US-based no frills airline in a deal thought to be worth around $300 million, according to a statement released by the airline today.

According to a statement released today by both companies, the move will proceed as part of Lufthansa’s current ongoing expansion strategy, and will be the first acquisition of its kind by a European airline in a US based rival.

At present, JetBlue operate exclusively domestically in the US, thus are unlikely to pose any direct threat to the sales of Lufthansa, which specialises in flights throughout Europe. More interestingly the move takes account of current economic factors, which will mean greater value for money for Lufthansa in light of favourable currency discrepancies between the Eurozone and the USA.

The move comes just several months after JetBlue announced its first profit in over two years for the third quarter, despite the fact that fuel prices have continued to rise pushing operating costs even higher.

However, with the company now carrying more passengers than ever before, it seems apparent that the growth in sales has been sufficient to counteract any negative effect from the rising fuel costs, which have seen many airlines struggle to maintain profit margins

Speaking today on the move, Lufthansa said they were delighted to announce their intention to acquire a 19% stake in the smaller US airline, which currently operates 550 flights per day at full capacity.

Whilst the company has forecast continuing growth in its domestic operations, aspirations of expansion in newer markets appears to be one of the main driving forces behind today’s move.

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