Lufthansa sale gets green light

The German government is poised to press ahead with enabling legislation that will allow it to sell its remaining 37.5 per cent stake in Lufthansa by the summer.

The Bundesrat (Germany's equivalent of the House of Commons) is expected to ratify the legislation on Friday, paving the way for a summer sale of shares in the German airline.

"The way to full privatisation is now clear," Matthias Wissmann, the Federal Transport Minister said last week. He also hinted that the Lufthansa share sale would be followed by the privatisation of German airports.

"The political intention to privatise must now be continued with the German airports. The entire German air transport system has grown out of infancy. Like other industries, it must prove itself in the shape of private organisations," he said.

However, Mr Wissmann used Germany's commitment to privatisation as a platform from which to shoot a thinly veiled warning across the bows of the planned alliance between British Airways and American Airlines.

"Worldwide cartels must be a thing of the past," he said. "It is now important to strictly adhere to the rules of competition and to eliminate potential disturbances to competition."

Mr Wissman was speaking in Frankfurt at the launch of the Star Alliance, which strengthens ties within the partnership between United Airlines, Lufthansa, Air Canada, Thai Airways and SAS.

Varig, the Brazilian airline, will join the alliance in the autumn. Discussions are also under way with British Midland to add the airline to the partnership.

Executives from the Star Alliance carriers were delighted by Mr Wissman's comments.