Erdogan signals Turkish Air, Lufthansa "joint management"

ISTANBUL Sat Nov 3, 2012 6:00pm GMT

Lufthansa planes are pictured at Frankfurt Airport February 22, 2010. REUTERS/Johannes Eisele

Lufthansa planes are pictured at Frankfurt Airport February 22, 2010.

Credit: Reuters/Johannes Eisele

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ISTANBUL (Reuters) - Lufthansa (LHAG.DE) and Turkish Airlines (THYAO.IS) should deepen their existing ties, Turkish Prime Minister Tayyip Erdogan said on Saturday, but it was not immediately clear what he meant and both companies declined to make specific comment.

The airline world has seen a flurry of partnerships recently as carriers band together to counter tough market conditions.

Turkish Airlines and Lufthansa are already joint owners of the SunExpress airline and members of the Star Alliance, one of the global airline networks.

Erdogan said he had agreed to a proposal by German Chancellor Angela Merkel to establish "joint management" of the two carriers.

"During my visit to Germany, Merkel made this proposal: 'let's put Lufthansa and Turkish Airlines under joint management'. I said okay," Erdogan said in a speech to his ruling AK Party.

"This is currently among our projects and God willing we can, and will, take this joint step with Turkish Airlines and Lufthansa," he said.

A German government spokesman declined to comment and Turkish officials were not immediately available to clarify.

A Turkish Airlines spokesman told Reuters he had not heard of such a development.

"There is nothing concrete that we have been informed of. If a big decision is to be taken here, a management board decision would be necessary. But there is no such thing at the moment," the spokesman said.

Lufthansa spokesman Klaus Walther said Germany's largest airline had a long-term relationship with Turkish Airlines via Star Alliance and joint venture Sun Express.

"We are always in talks about how we can further improve and intensify the cooperation between Lufthansa and Turkish Airlines for the benefit of our customers," he said.

But he declined to comment on what form a deeper cooperation could take.

A Turkish Privatisation Administration (OIB) official said last month there had been no decision on the method or size of a privatisation of some of the government's 49.12 percent stake in Turkish Airlines after a newspaper report said the state planned a 30 percent block sale.

Lufthansa is currently in the middle of a 1.5 billion euro (1.2 billion pounds) cost cutting programme to combat rising fuel costs and increased competition from low cost and Gulf rivals. It has said that the programme is needed so it can afford new fuel-efficient planes and that's its focus at present rather than any acquisitions.

(Additional reporting by Evrim Ergin in Istanbul and Victoria Bryan in Frankfurt; Writing by Daren Butler; Editing by Jon Hemming)

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