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Why TXL-IAD Won´t Last

Thu Aug 16, 2001 7:49 pm

Hi everybody,

in yesterday´s Berliner Zeitung was a very interesting analysis on the development of Berlin´s sole direct USA service, LH´s A340 flight to IAD, six times weekly. This routed was only started this summer schedule.

In my opinion the figures mentioned in that article will inevitably lead to the eventuel discontinuation of that route. But see for yourself:

C and F class are only 10 % full. 20-25% would be necessary to make such a flight profitable. This means, by the way, that Y class must be constantly sold out, otherwise they wouldn´t get the overall percentage of 78.4.
Consequently, the overall average ticket price per pax is only € 614 for the return ticket. FRA-IAD gets € 914 on average.

The reasons for that lack of high yield traffic is simple: the expected politicians and business travellers don´t show up as expected:

Members of Parliament - according to a Bundestag spokeswoman, these politician tend to start USA trips in their home constituency and connect via FRA.

DaimlerChryslerServices - they have their HQ at Berlin, but employees on USA trips normally use the STR-DET company shuttle.

Siemens - they are huge as well in Berlin, but USA trips usually start at NUE or MUC, where Siemens´ Information and Communication Departments have their respective HQs.

Concluding, LH CEO Juergen Weber was quoted as saying LH would have to evaluate whether the TXL-IAD service would be viable to maintain without sufficient demand from the Berlin REGION.

Given that that region is the economically weak Eastern Germany, I´d say this is a rather gloomy outlook for that route.

Any thoughts, additions, citicism from you?

Daniel Smile
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RE: Why TXL-IAD Won´t Last

Thu Aug 16, 2001 10:36 pm

That's a very well-thought case, Daniel. On the US end of that flight, the situation isn't much different. Dulles Airport sits of course in the middle of one of the United States' major tech centers, Northern Virginia. The tech sector in Northern Va. and the DC area has taken a big hit in the past year. For instance AOL just announced plans to lay off 1000.

That means a lot less business-class and first-class O & D traffic. Although Dulles is a hub which no doubt helps, O & D traffic is vital to a second-tier flight.

I'd be sorry to see the flight go...kind of neat distinction for DC to have and great for travelers to Berlin. But if yields are low due to empty business and first-class cabins, the flight probably won't last long.

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RE: Why TXL-IAD Won´t Last

Thu Aug 16, 2001 10:38 pm

I don't know. I think that LH should have first started up JFK or EWR-TXL, see how that fared, and then start IAD-TXL
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RE: Why TXL-IAD Won´t Last

Fri Aug 17, 2001 1:31 am

i don´t think that JFK or EWR would have fared better, but i would have thought perhaps ORD...

If only pure sweetness was offered, why's this bitter taste left in my mouth.
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RE: Why TXL-IAD Won´t Last

Fri Aug 17, 2001 3:57 am

This route may be five years ahead of its time. Right now Berlin-TXL can't support many connections to feed passengers on this flight. Therefore, at least on the Berlin end of the route, the passengers are mainly originating or ending their trips. Until the new airport is built at Schönefeld in 2006, Berlin's O-D traffic may be too small to keep this route profitable.
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RE: Why TXL-IAD Won´t Last

Fri Aug 17, 2001 5:31 am

Delta unsuccessfully tried TXL-JFK with an A310 and 767-300, so the LH IAD service probably won't last. The main problem is the lack of Berlin feeder traffic by the surrounding economically-depressed eastern region.

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