Lufthansa: We Will Stay in Charlotte Despite Oneworld Hub

CHARLOTTE, N.C. (TheStreet) -- US Airways' merger with American (AAL)AAL means Charlotte will become a Oneworld hub rather than a Star Alliance hub, but Star co-founder Lufthansa said it will stay in Charlotte nevertheless.

Lufthansa operates daily Charlotte-Munich service aboard an A330 seating 221 passengers in three classes. US Airways, which operates about 90% of all Charlotte flights, has said it will leave Star on March 30.

About half of Lufthansa's Charlotte-Munich service originates in Europe, while about half of the passengers originating in Charlotte -- or about 25% overall -- connect to and from US Airways.

Despite US Airways' alliance switch, "we are here to stay," Juergen Siebenrock, Lufthansa vice president for the Americas, told reporters on Tuesday. "We are committed to Charlotte. We have a strong presence here. People know us. But we need some support; we need a larger portion of the local market."

Siebenrock said Charlotte-Munich is "one of our best routes," largely as a result of a strong Charlotte regional presence by scores of German corporations. In South Carolina, German company BMW is among the largest employers and Continental Tire has its U.S. tire headquarters. In fact, as Siebenrock spoke at a south Charlotte hotel, Continental Tire held a national sales conference in a nearby conference room.

But it's not just big German companies that fill the first and business class seats on the Charlotte-Munich flight. When Lufthansa inaugurated Charlotte service in 2004, the Charlotte region had about 150 German companies. Now it has more than 200. Most are mid-sized businesses.

German customers are loyal, Siebenrock said. "It's a part of their home when they step on a Lufthansa plane," he said. "Lufthansa is a very strong brand in Germany, one of the most popular employers."

On the Charlotte-Munich, about 40% of the passengers are business customers. That is about average for Lufthansa, but all of the business customers in Charlotte are trans-Atlantic passengers.

Given the large share of passengers who connect with US Airways flights, Lufthansa realizes it will need to stimulate more local traffic. Siebenrock was noncommittal when asked if it might reduce fares. Rather, the emphasis will be on marketing Lufthansa's superior service.

Starting in March, Lufthansa will offer four-class service, including premium economy, which will be available on all long-haul flights by the end of 2015.

Trans-Atlantic service accounts for 8% of revenue at Lufthansa, which flies to 19 U.S. cities, three cities in Canada and six cities in Central and South America. The carrier has grown North Atlantic capacity in each of the past three years, not because of more frequencies but rather due to larger aircraft including, in some cases, the Airbus A380. Its Southeast markets include Atlanta, Charlotte, Miami and Orlando. Despite the Florida service, many of the leisure passengers on the Munich-Charlotte flight are headed for Florida.

While Lufthansa and US Airways/American will no longer code share on flights, they will maintain interline agreements, said Don Bunkenburg, managing director of corporate sales. Passengers can continue to purchase tickets from one airline and fly on the other's connecting flight, although the carriers will not put their codes on those flights.

Charlotte and Germany's ties are historic, which contributes to the concentration of German businesses. Charlotte is located in Mecklenburg County, named for Queen Charlotte of Mecklenburg, a German princess who married King George III of England.

Additionally Wachovia, long a major North Carolina bank before it merged with Wells Fargo, adopted the German name of the land settled by Moravians who came to North Carolina in 1753, according to Wikipedia. Siebenrock was scheduled to speak Tuesday night to Charlotte's German American Chamber of Commerce.

Munich is Lufthansa's second-largest hub and, for some travelers, represents an attractive option to bigger Frankfurt International Airport, just as Charlotte represents an attractive option to Atlanta's bigger airport.

The delegation of three Lufthansa executives visited Charlotte to show the airline's continued commitment. Of course, American faces similar questions regarding its Charlotte-Frankfurt flight, which will no longer have an alliance partner at its destination.

Oneworld's key European partners are British Airways and Iberia: the German Oneworld carrier is Air Berlin, which has hubs in Berlin and Dusseldorf. American has no plans to discontinue its daily Charlotte-Frankfort service, said spokeswoman Michelle Mohr.

Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc

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