Lufthansa poised to join low-cost rush

Lufthansa poised to join low-cost rush

Low-cost, long-haul flights may be launched by Lufthansa under a new brand as part of plans by the carrier’s new boss to battle competition from Middle East and budget airlines.

Chief executive Carsten Spohr, who joined in May, hopes to attract leisure travellers with cheaper tickets and no-frills services, while still keeping the airline’s premium namesake brand.

The German carrier is in advanced talks to set up a joint long-haul operation with Turkish Airlines, Spohr said, though Lufthansa could end up going it alone as well.

“There are markets where we believe that the Lufthansa brand is important. In other markets we believe that cost sensitivities are so high, we don’t need a full-service brand,” he said, explaining that the market for leisure travel was growing faster than business travel via hubs.

Spohr’s plan is for Lufthansa to expand its European low-cost service through subsidiaries Germanwings and regional carrier Eurowings and possibly add a new one for long-haul flights as budget rivals and Gulf-based airlines put a squeeze on profits.

It could consider offering long-haul flights from Munich or the western German cities of Cologne and Dusseldorf, with a premium section for higher paying passengers, using Boeing 767s or Airbus A330s.

If Lufthansa’s board approves the plans, such flights could start by the end of 2015, Reutersreported.

Germanwings operates on a cost basis that is 20% lower than that of the Lufthansa brand, while Eurowings is 20% lower than Germanwings, Spohr said.

“I think Wings has the potential to become the third-biggest low-cost point-to-point airline in Europe,” he said. Three quarters of all intercontinental air travel and 79% of European air travel was for private reasons, rather than business trips, he added.

Sourced from Travel Weekly

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