Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
LH To Launch A Long Haul Low Cost Carrier?  
User currently offlineAF185 From Hong Kong, joined Sep 2012, 257 posts, RR: 0
Posted (1 year 5 months 1 week 4 days 2 hours ago) and read 17853 times:

According to Bloomberg, LH is considering setting up a JV or a whole new carrier, to offer long haul low cost flights.
The main target is Asia to counter the competition from Gulf Carriers

Quote:
Deutsche Lufthansa AG (LHA) is weighing whether to form a partnership with another carrier or start its own new long-haul, low-cost venture to help it expand in Asia, Chief Financial Officer Simone Menne said.

Europe’s second-largest airline won’t be able to keep pace with Persian Gulf-based rivals such as Emirates airline and Etihad Airways PJSC without a change in strategy, Menne said at a briefing with reporters in New York.

Whole story here: http://www.bloomberg.com/news/2013-0...-cost-carrier-targeting-asian.html

We have seen Air Asia failing in linking Asia to Europe on a low cost basis. Can LH succeed there?

[Edited 2013-03-25 23:20:45]

53 replies: All unread, showing first 25:
 
User currently offlineMortyman From Norway, joined Aug 2006, 3897 posts, RR: 1
Reply 1, posted (1 year 5 months 1 week 4 days 2 hours ago) and read 17830 times:

Well, Norwegian is gonna do low cost too. Remains to be seen who will be the most succesful ...

User currently offlineSASMD82 From Netherlands, joined Mar 2007, 749 posts, RR: 0
Reply 2, posted (1 year 5 months 1 week 4 days 1 hour ago) and read 17650 times:
Support Airliners.net - become a First Class Member!

I'd say: transfer Swiss into a low cost carrier within the next few years. Their 777-300ER can do a very full trunk of people very efficiently!   

User currently onlineAndyEastMids From United Kingdom, joined Jan 2001, 1017 posts, RR: 2
Reply 3, posted (1 year 5 months 1 week 4 days ago) and read 17204 times:

The Gulf carriers, from which Lufthansa sees the threat as coming, have built their business in part on offering a quality service, not a low cost service. I wonder why Lufthansa thinks something cheap and nasty might be the solution?

User currently offlinePanHAM From Germany, joined May 2005, 9338 posts, RR: 29
Reply 4, posted (1 year 5 months 1 week 4 days ago) and read 17118 times:

They are pondering all options, including retreat from those markets.

IMHO, a four class system, F J Y+ and Y- is already a LCC combined with a regular service carrier in the same aircraft.

Thje Guld carriers have 40% less costs than LH and there is no way that can be changed and offer a similar service.

.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineseahawk From Germany, joined May 2005, 1028 posts, RR: 0
Reply 5, posted (1 year 5 months 1 week 3 days 23 hours ago) and read 16903 times:

Low cost could also mean, lower operating costs. Think about an LH owned airline based in Asia.

User currently offlineJU068 From Vanuatu, joined Aug 2009, 2612 posts, RR: 6
Reply 6, posted (1 year 5 months 1 week 3 days 23 hours ago) and read 16894 times:
Support Airliners.net - become a First Class Member!

I guess they would fly them to destinations where there is a considerable O&D market and where they would have to compete, not only with the Gulf carriers, but with other Asian carriers which have a lower cost structure- airlines like Thai for example.

I wonder if these flights would replace the Lufthansa ones or if they would operate from secondary airports. Maybe out of airports where Germanwings have a considerable presence so as to offer connections.


User currently offlinecuban8 From Kiribati, joined Sep 2009, 270 posts, RR: 0
Reply 7, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16720 times:

Quoting Mortyman (Reply 1):
Well, Norwegian is gonna do low cost too. Remains to be seen who will be the most succesful ...

Remains to be seen if Norwegian will be successful at all...

Quoting JU068 (Reply 6):
Maybe out of airports where Germanwings have a considerable presence so as to offer connections.

I think you might be on to something. If this would be the case, I believe they would compete against Air Berlin and Condor, rather than the Gulf carriers.


User currently offlinePanHAM From Germany, joined May 2005, 9338 posts, RR: 29
Reply 8, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16616 times:

Quoting cuban8 (Reply 7):
Condor, rather than the Gulf carriers.

even Condor needs the connectiviy which is given only at FRA and MUC. DE has covered all the nich destinations around the globe and their only probem right now are the working conditions aat FRA.

If CGN, just to mention one, would be viable it would be done by Asian LCCs.

Of course LH can start, with a local sponsor, an airline in the UAE, may be at DWC. That would be fun to watch.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinebavair From Germany, joined Jul 2011, 125 posts, RR: 0
Reply 9, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16616 times:

Could this have to do with the ongoing talks with CA about close cooperation? It wouldn't be their first JV (Ameco Beijing). Or TK?

User currently offlineJU068 From Vanuatu, joined Aug 2009, 2612 posts, RR: 6
Reply 10, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16588 times:
Support Airliners.net - become a First Class Member!

Quoting cuban8 (Reply 7):
Remains to be seen if Norwegian will be successful at all...

Didn't the Norwegian court rule against basing foreign crew in Asia? That could be a great problem for the airline.

Quoting cuban8 (Reply 7):
I think you might be on to something. If this would be the case, I believe they would compete against Air Berlin and Condor, rather than the Gulf carriers

Well, I think this might be a response to the growing presence of the Gulf carriers all across Germany. Naturally both Air Berlin and Condor are not making Lufthansa's life any easier.


User currently offlinePanHAM From Germany, joined May 2005, 9338 posts, RR: 29
Reply 11, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16504 times:

Quoting bavair (Reply 9):
Could this have to do with the ongoing talks with CA about close cooperation? It wouldn't be their first JV (Ameco Beijing). Or TK

Running an MRO shop reqzuires a local partner and is fully subject to local laws bsides the world wide valid JAA/FAA rules.

Running an airline as a JV is a different storsy starting from the traffic rights. A German compaqny would always have a minority when such a JV is ased outside Germany, Think what happened to JADE.

besides, both CA and TK home countries have different economic systems, not speaking of different cultures. Plus, we see what just happens inside the EU.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinerutankrd From United Kingdom, joined Sep 2003, 2987 posts, RR: 7
Reply 12, posted (1 year 5 months 1 week 3 days 22 hours ago) and read 16443 times:
Support Airliners.net - become a First Class Member!

Why not simply buy back the 1/3 stake in Thomas Cook - Condor.

Thomas Cook could do with the money and the Condor brand has been associated with LH for half a century

For most of that time it was wholly owned and operated both Mediterranean and Long haul Holiday flights.

[Edited 2013-03-26 04:00:35]

User currently offlinePanHAM From Germany, joined May 2005, 9338 posts, RR: 29
Reply 13, posted (1 year 5 months 1 week 3 days 21 hours ago) and read 16340 times:

Buying back the Condor shares is an option, but LH and DE are co-operating anyhow since LH feeds the long haul flights of DE and there are few if any overlapping markets. At least not long haul.

besides that DE is not a real LCC but offeres certain services a true LCC does not, like connecting flights, through checked bags and many more.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinejfk777 From United States of America, joined Aug 2006, 8344 posts, RR: 7
Reply 14, posted (1 year 5 months 1 week 3 days 21 hours ago) and read 16084 times:
Support Airliners.net - become a First Class Member!

Quoting SASMD82 (Reply 2):
I'd say: transfer Swiss into a low cost carrier within the next few years. Their 777-300ER can do a very full trunk of people very efficiently!

This is the worst idea ever posted. Switzerland is Business center with rich bankers and people willing to pay for J class tickets. The reason for the 777 order is to carry more people then the A340 currently in the fleet. SWISS and Swissair have always been full service arlines and to suggest otherwise is wrong, if Eddelweiss should be expanded is another question. Eddelweiss is the LCC division of Swiss.


User currently offlineJU068 From Vanuatu, joined Aug 2009, 2612 posts, RR: 6
Reply 15, posted (1 year 5 months 1 week 3 days 21 hours ago) and read 15994 times:
Support Airliners.net - become a First Class Member!

It is interesting, just because it was mentioned here, that after six years Condor will be launching longhaul flights from Munch.
They will base two B767-300s and will fly to Santa Clara, Cancun, Mauritius, Mombassa, Montego Bay, Puerto Plata, Punta Cana and Varadero. They are also launching Bangkok from Frankfurt.


User currently offlineBrouAviation From Netherlands, joined Jun 2009, 985 posts, RR: 1
Reply 16, posted (1 year 5 months 1 week 3 days 20 hours ago) and read 15952 times:

Quoting SASMD82 (Reply 2):

I'd say: transfer Swiss into a low cost carrier within the next few years. Their 777-300ER can do a very full trunk of people very efficiently!

I hope that was tongue-in-cheek. As that is most probably the stupidest suggestion ever done.Switzerland is one of the highest yielding markets in Europe, and LX is one of the few parts of LH making money the way it is right now. And it is shockingly affordable to fly LX already, by the way. They come up as the cheapest option 80% of the time for me..

EDIT:

Quoting jfk777 (Reply 14):
This is the worst idea ever posted.

You beat me to it, was too eager to reply so skipped your post initially.

[Edited 2013-03-26 05:09:10]


Never ask somebody if he's a pilot. If he is, he will let you know soon enough!
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17450 posts, RR: 46
Reply 17, posted (1 year 5 months 1 week 3 days 20 hours ago) and read 15680 times:

Quoting AndyEastMids (Reply 3):
have built their business in part on offering a quality service, not a low cost service

I think this is a major misconception--people fly the ME carriers because they are either cheapest or offer the best schedule, and compared to AI/PK and other carriers in the region, that's not hard to do. EK's product in F is nice, but otherwise is not particularly good in any way, but its India connectivity is industry leading. Nonetheless, people will pay a premium to go nonstop; whether it's enough to cover the increased costs is another issue. Ultimately LH needs to reduce its costs, not start another operation.



E pur si muove -Galileo
User currently offlineSASMD82 From Netherlands, joined Mar 2007, 749 posts, RR: 0
Reply 18, posted (1 year 5 months 1 week 3 days 19 hours ago) and read 15588 times:
Support Airliners.net - become a First Class Member!

Quoting jfk777 (Reply 14):
Quoting SASMD82 (Reply 2):
I'd say: transfer Swiss into a low cost carrier within the next few years. Their 777-300ER can do a very full trunk of people very efficiently!

This is the worst idea ever posted. Switzerland is Business center with rich bankers and people willing to pay for J class tickets. The reason for the 777 order is to carry more people then the A340 currently in the fleet. SWISS and Swissair have always been full service arlines and to suggest otherwise is wrong, if Eddelweiss should be expanded is another question. Eddelweiss is the LCC division of Swiss.
Quoting BrouAviation (Reply 16):
Quoting SASMD82 (Reply 2):

I'd say: transfer Swiss into a low cost carrier within the next few years. Their 777-300ER can do a very full trunk of people very efficiently!

I hope that was tongue-in-cheek. As that is most probably the stupidest suggestion ever done.Switzerland is one of the highest yielding markets in Europe, and LX is one of the few parts of LH making money the way it is right now. And it is shockingly affordable to fly LX already, by the way. They come up as the cheapest option 80% of the time for me..

EDIT:

Quoting jfk777 (Reply 14):
This is the worst idea ever posted.

You beat me to it, was too eager to reply so skipped your post initially.

Guys, this is called irony, hence my 'duck' at the end. Of course this will not be happening.


User currently offlinea3xx900 From Germany, joined Jan 2004, 335 posts, RR: 0
Reply 19, posted (1 year 5 months 1 week 3 days 18 hours ago) and read 14205 times:

Maybe rather a "Lufthansa Asia" based in DXB. Isn't the treaty still active that allows German carriers to operate routes out of Dubai (and EK routes out of Germany)? That way they could cut costs and offer services from Germany to Asia (with a DXB stopover).
Just throwing that out there. IMHO this is more feasible than LH starting a real no-frills service. As said above, costs would still be the same, and how much less frills could you get? Food for purchase? But that's it?



Why is 10 afraid of 7? Because 7 8 9.
User currently offlineSkyguy From United States of America, joined Feb 2004, 481 posts, RR: 0
Reply 20, posted (1 year 5 months 1 week 3 days 17 hours ago) and read 13521 times:

Quoting AndyEastMids (Reply 3):
The Gulf carriers, from which Lufthansa sees the threat as coming, have built their business in part on offering a quality service, not a low cost service. I wonder why Lufthansa thinks something cheap and nasty might be the solution?

If LH can provide a service at a cheap enough fare to long haul destinations non-stop, thereby enticing those customers who currently use the Middle East carriers and their enhanced servicing offering, then this may be a successful strategy.
Problem is LH's costs, if they can not offer a fare which is high enough to make it economically viable for them, and low enough to attract customers, then this will not work.
However, the kind of travelers this is aimed at is the Economy class vacationers and the like (basically non-business travelers) for whom non-stop travel fares from Europe to destinations n Asia/Africa/S.America are currently too pricy and don't mind the stopover connection in DXB, AUH, DOH etc. It is this group of customers that LH want to target.

We have seen quite a few full service established airlines in Europe and also in the US try out having subsidiaries providing LCC services, but eventually none appear to have succeeded in the long term. Maybe LH has this figured out and can make a go of it.



"Those who talk, do not know, and those who know, do not talk."
User currently offlineLH506 From Ecuador, joined May 2007, 464 posts, RR: 0
Reply 21, posted (1 year 5 months 1 week 3 days 15 hours ago) and read 12240 times:

I see it this way.

The cheap end Y customer to BKK, DEL, KUL, DPS...finds a cheaper one stop option from Europe with TK, EK, QR or many times AF-KL

The high end Y customer looks for flight convenience. From many European major cities you fly one stop via DXB, IST, DOH offering more destinations. LHs presence in Asia is rather shrinking, they left MNL, Jakarta, CCU, HYD over the last years, offer inconvenient less than daily one stops like KUL where the competition is non stop daily. Why would you pay to fly LH?

The C class passenger looks for the same as the high end Y. What is LHs distinguishing advantage? I think none. LHs is not bad either, but you would not pay more to fly them to pay the higher operating costs in Germany.

LH relied to long on their name and star alliance connections instead of building up and developing their own network including holiday destinations. Now it is too late. The business passenger enjoys TK as much as LH, the leisure passenger is long gone. I do not know how profitable the whole 1st class story still is, incl. limousine service, own terminal etc. Looking at the fact that KLM is highly profitable (at least from what I read here on the forum) without offering this, I at least have my doubts that LH took the right strategic decision.



NOT FLOWN: 707 717 736/9 764 77L 787 300B2 300B4 345 RJ70/146-100 F27 ATR72 CRJ1/4/10 E120/135/40/95 Q1/2/3 M87
User currently offlineTS-IOR From Tunisia, joined Oct 2001, 3469 posts, RR: 6
Reply 22, posted (1 year 5 months 1 week 3 days 15 hours ago) and read 12094 times:

They can bet on Condor and reinforce their traditional familial ties...

User currently offlineairbazar From United States of America, joined Sep 2003, 8322 posts, RR: 10
Reply 23, posted (1 year 5 months 1 week 3 days 14 hours ago) and read 11608 times:

Quoting AndyEastMids (Reply 3):
The Gulf carriers, from which Lufthansa sees the threat as coming, have built their business in part on offering a quality service, not a low cost service. I wonder why Lufthansa thinks something cheap and nasty might be the solution?

Low cost is not the same as no frills. It does not have to be "cheap and nasty". At the end of the day, the gulf carriers have built their business by offering a more convenient alternative and at times a cheaper alternative. 95% of passengers don't care about the perceived quality of the gulf carriers. They fly with them because they are cheaper. Nothing more and nothing less.


User currently offlinebehramjee From Canada, joined Aug 2003, 4774 posts, RR: 43
Reply 24, posted (1 year 5 months 1 week 3 days 14 hours ago) and read 11252 times:

There are two things I feel that LH can do here instead of creating a whole new airline for this very purpose:

1. Order a bunch of B777-300ERs and configure them in more or less the same manner as Air Canada has for high density long haul operations i.e. 430-440 seats in a J / Y class configuration. Routes that can support such a high density layout include BKK, MIA, PEK, ICN, DEL, KUL, JNB, EZE and GIG.

2. If ordering a dedicated fleet of B77Ws (over a dozen required minimum) for this type of service is too capital intensive, then it could look into reconfiguring many of its A346s into a high density 2 class layout seating 380-390 passengers.

Question though...if the B748s had only the upper deck as J class and the lower deck as an all economy only, how many seats maximum could it accommodate on board?


25 SASMD82 : OK, my idea to use the 77Ws that were ordered for LX (ok, it was a little sarcasm/irony) was claimed by jfk777 and BrouAviation to be the most stupid
26 aloges : Are you familiar with their current CEO? He's a die-hard cost cutter before all else.[Edited 2013-03-26 12:05:14]
27 Post contains links mah4546 : I don't think LH wants to eliminate first to Miami and Johannesburg. The healthiest first-class routes include Frankfurt to Kuwait, Johannesburg, Riy
28 mbm3 : Pack the coach customers in on top with lower frills fares and a la carte services and build profit with the cargo revenue below. Interesting concept
29 airbazar : Those ideas fail to create a low cost option which is the entire point of this exercise. The single biggest line item in a legacy carrier after fuel,
30 YTZ : The fact that they think an LCC is a solution to the ME3+TK shows that LH doesn't get it. People travel by EK/EY/QR not just because of the fare (whic
31 HB-IWC : Hasn't there been talk about LH converting a number of the remaining B744 in a higher density 2-class configuration. That could well do the job. Look
32 steve6666 : Sorry, I am confused 1. Since when has Bali been an attractive high yielding destination for a European carrier? Or a high yielding destination for an
33 Viscount724 : I basically agree with your comments, although I would say Edelweiss is the "leisure carrier" of Swiss, rather than an "LCC". The terms "low cost" an
34 YTZ : You're entire argument is based on J and F in a thread about LH launching a long-haul LCC? 1. You missed my point. Bali isn't a high-yield destinatio
35 RyanairGuru : I agree 100% The ME3 are rarely the cheapest in my experience. Their biggest draw is network. For example, from Australia nobody can get you more pla
36 columba : My idea what could happen is that LH tranfers a few A330s to Germanwings and offer direct flights from DUS, BER and HAM.........
37 steve6666 : You introduced the argument about a horrible middle seat in J on LH in a LCC discussion and seemed to ignore the fact EK have an equally horrible mid
38 PanHAM : Back to the PR statement by LH, they are looking at all options, including pulling out of certain markets, which they have done already in India. sett
39 Post contains images airbazar : Right. Arguably the single most succesfull airline in the world which has been consistently profitable even in the last few years despite a global ec
40 Post contains images YTZ : For a second, I thought you were talking about Emirates.... In the context of this discussion, yes, I don't think LH "gets it", if they think an LCC
41 YTZ : LH can compete. I would say they gotta build their network. And they have to rejig the fleet. Some high-density aircraft for lower-yielding destinati
42 airbazar : It still doesn't take away from the fact that their labor costs are a lot higher. LCC can mean a lot of different things. JetBlue has better service
43 aloges : Where did you get that number?
44 airbazar : From the same place every one does. It's a common fact that 90% of passengers are only interested in one thing: the lowest fare. That's true in any p
45 YTZ : Not directly. Cost can certainly be diluted with higher density aircraft. I highly doubt there'll be a case for secondary cities in Europe to connect
46 SCQ83 : Not everyone lives in Frankfurt, Paris or London... nor is flying to Hong Kong or Tokyo. The ME3 have established themselves particularly well in "se
47 Post contains images RyanairGuru : +1000 The legacies are focussed on major city links, LHR-BKK, FRA-SIN, CDG-PVG etc. That's understandable because that is where the corporate demand
48 Post contains images ZKEOJ : at 10 abreast in their new 777s
49 BSLFRA : I would like to share the opinion of the south indian community living in Germany on this. So this topic starts with LH going forward with a LCC brand
50 seahawk : Scoot could be an interesting partner.
51 Semaex : Could you elaborate on the "working conditions" which pose a problem at FRA for DE? Naturally maybe, yes. But as much as I wish it would be the case,
52 SCQ83 : Interesting points. As for LH/FRA, having flown a few times to "secondary" destinations in Africa/Middle East (and then continuing to the US/Europe),
53 PanHAM : as you may have thought already, a too rigid curfew allowing (too) few exemptions and not observing operational needs and necessities.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Why So Few Long Haul Low Cost Carriers? posted Fri Jan 5 2007 13:42:42 by 777MAS
LH To Place Long Haul Order In Dec. Won't Cut A380 posted Thu Sep 21 2006 16:28:55 by NYC777
Sterling To Fly Long Distance Low-Cost posted Fri Apr 15 2005 09:16:22 by McGoose
LH To Launch Low Cost Airline posted Tue Feb 5 2002 10:02:43 by Lhuaaua
Spainair To Launch 717 Low Cost Carrier. posted Thu Mar 23 2000 23:53:12 by CX747
All Nippon Airways To Start Asian Low Cost Carrier posted Tue Mar 25 2008 18:12:25 by SINGAPORE_AIR
Emirates To Manage New Low -Cost Carrier posted Tue Mar 18 2008 11:28:55 by Beaucaire
Low Cost Carrier To Build Terminal At AUS? posted Wed Jun 27 2007 04:42:03 by Slovacek747
Any Chance Of Low Cost Carrier To TVC? posted Thu Mar 22 2007 22:50:41 by Denver11
US To India: New Low Cost Carrier posted Fri Jun 16 2006 06:25:16 by Aseem