nyswiss
Topic Author
Posts: 25
Joined: Fri Mar 23, 2007 9:59 pm

Swiss To Folllow Lufthansa Low Cost Strategy?

Sun Sep 23, 2012 7:05 pm

I'm curious to hear whether Swiss will follow Lufthansa's strategy and be part part of the new model for Lufthansa's low cost approach for Europe ?
 
runway23
Posts: 1914
Joined: Sat Jan 15, 2005 2:12 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Sun Sep 23, 2012 7:12 pm

Quoting nyswiss (Thread starter):

I'm curious to hear whether Swiss will follow Lufthansa's strategy and be part part of the new model for Lufthansa's low cost approach for Europe ?

No they won't. There is enough high yield traffic between ZRH, GVA (and to a lesser extent BSL) to maintain two class products.

The Edelweiss brand already looks after vacation and lower yield traffic.
 
Viscount724
Posts: 18838
Joined: Thu Oct 12, 2006 7:32 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Sun Sep 23, 2012 7:31 pm

LX had a terrible experience soon after they were created when they switched to a buy-on-board product in Y class within Europe in an effort to cut costs and return to profitability (they were losing money heavily then).

It was universally hated by customers, especially the very large number of passengers connecting to/from longhaul international flights. It was totally contrary to the high-quality image LX was trying to portray in the wake of the demise of very high quality Swissair, and the overall image of Switzerland as offering high standards of service. I highly doubt LX will repeat that mistake.
 
seansasLCY
Posts: 703
Joined: Mon Mar 19, 2007 5:25 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Sun Sep 23, 2012 7:35 pm

The RJ100 fleet are already operated by "Swiss European Air Lines" which has a different contract. Maybe they could use this arm?
 
ab1247
Posts: 25
Joined: Thu Mar 03, 2005 9:59 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Sun Sep 23, 2012 7:53 pm

In a way, LX will expand its lower-cost wing by the fact that it will replace the RJ100 and the A319 with the new CSeries. By doing this, they will effectively push the A319 traffic into their lower-cost contract with Swiss European Airlines, growing that share of Swiss European from 20 aircraft to 30 (as well as shedding some wet-lease agreements with Helvetic).

They're doing this very quietly, but I think that it will in the end help to reduce costs on the medium/low yield sector quite significantly. SWISS does not do short-term contract crews per their work contracts, so you will not see this anytime soon.

@seansasLCY: I hope that LH will not force LX to make this mistake again...
 
User avatar
autothrust
Posts: 1455
Joined: Sun Jun 11, 2006 8:54 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 7:01 am

Quoting nyswiss (Thread starter):
be part part of the new model for Lufthansa's low cost approach for Europe ?

They do already. The service has decreased dramatically. I've flown Swissair and Swiss from 1986 until now.

My last flight with LX was horrible and not for a cheap price. Next time i will eventually take the car.
“Faliure is not an option.”
 
glidepath73
Posts: 921
Joined: Mon Mar 14, 2005 8:44 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 7:13 am

I hope LX keeps just the actual standard, despite the possible upcoming stronger downturn in the aviation industry.
It is still better than lot's of other cabin products around the world.
LX actual product, in combination with the very attractive ZRH hub is a cash cow for the LH group. They should not try to make things better in LH's view (it woud only get cheaper and worse in this case).

Greetz,
Patrick
Aviation! That rocks...
 
IndianicWorld
Posts: 2770
Joined: Mon Jun 04, 2001 11:32 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 8:11 am

Quoting autothrust (Reply 5):
They do already. The service has decreased dramatically. I've flown Swissair and Swiss from 1986 until now.

My last flight with LX was horrible and not for a cheap price. Next time i will eventually take the car.

Welcome to the world of modern day aviation  

Its no different to nearly every other carrier out there.
 
tmcn
Posts: 34
Joined: Mon Jan 19, 2009 10:15 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 1:11 pm

I wouldn't say LH is low cost. Try AF, IB or the real low cost airlines, in my opinion LH short-haul is still one of the better products.
 
lhcvg
Posts: 1255
Joined: Mon May 25, 2009 2:53 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 1:47 pm

Quoting glidepath73 (Reply 6):

I don't get the impression LX is necessarily under the axe for wholesale changes. To me, LH's statements are simply reflective of the reality that a massive global airline has to achieve some cost savings. That seems very much like what we see here in the U.S.: much as we like to gripe about poor service quality on U.S. carriers, I don't see how they could offer world-leading service on every single route everywhere given the highly variable profitability of various routes. Same goes for longhaul F - notice how LH is moving in the direction of the remaining 3-class U.S. airlines, where only certain routes will see 3-class from here on out.

Now back to LX: since they are more a niche, luxury carrier (not a mass-market airline flying everywhere, and they try to maintain a higher level of quality even if that means higher fares), I think they can support a less "efficient" operation in the minds of LH management. Sure, there will be some re-alignments and savings, such as C-series planes replacing some small mainline aircraft, but as the "luxury" carrier within LH group, they are probably safer overall because they aren't chasing every last pax and are more apt to cherry-pick routes.
 
sandrozrh
Posts: 2420
Joined: Sun Feb 04, 2007 12:19 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 2:15 pm

Quoting seansasLCY (Reply 3):
The RJ100 fleet are already operated by "Swiss European Air Lines" which has a different contract. Maybe they could use this arm?

Not possible. Our contract limits the amount of seats Swiss European is allowed to offer per plane. Even the CSeries will have to be re-negotiated.
 
runway23
Posts: 1914
Joined: Sat Jan 15, 2005 2:12 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 2:58 pm

Quoting SandroZRH (Reply 10):
Not possible. Our contract limits the amount of seats Swiss European is allowed to offer per plane. Even the CSeries will have to be re-negotiated.

In any case if LX do dump 319s for CS100s, they will be forced to add additional 320s (at least 7 to make up for the lost 319s in the short haul Airbus fleet).

Therefore if Swiss European goes from a fleet of 20 aircraft to one of 30 (which it seems would be the case), I am sure LX mainline union will want at least 10 to 15 new Airbus 320s or 321s, or some additional widebodies.

How LX will find enough staff to crew these new planes is another question.
 
laca773
Posts: 2032
Joined: Sat Nov 06, 2004 7:10 am

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 4:43 pm

I don't see LX going with LH's non-hub LC strategy. LX's market is much, much smaller than LH's in terms of domestic routes served. Further, when LX attempted to operate with a BOB, and etc., their loyal customers, FFs were very disenchanted by it. Obviously, that experiment was deemed a failure and quickly disposed of.
 
Semaex
Posts: 731
Joined: Mon Nov 23, 2009 4:17 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 7:24 pm

Quoting SandroZRH (Reply 10):
Not possible. Our contract limits the amount of seats Swiss European is allowed to offer per plane. Even the CSeries will have to be re-negotiated.

Are you sure? I remember LH and CLH in talks about the maximum seats a "regional" subsidiary can offer, but the terms were re-negotiated in CLHs favour (as can be seen with the introduction of the Embraers).


On topic: I think the OP may be mixing up the SCORE-program (in which Swiss definitely takes part in) with the rumours around "direct4U", which is aiming at the LCCs and namely 4U and EW, where LX better stays an untouched holy grail, because neither their product nor their numbers justify putting them in the low cost corner.

[Edited 2012-09-24 12:26:55]
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
Viscount724
Posts: 18838
Joined: Thu Oct 12, 2006 7:32 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 8:51 pm

Quoting LHCVG (Reply 9):
Now back to LX: since they are more a niche, luxury carrier (not a mass-market airline flying everywhere, and they try to maintain a higher level of quality even if that means higher fares),

That's not really accurate, especially within Europe where their Y class product is no better than their major non-LCC competitors (leaving aside a couple of major carriers like SAS and Iberia that are buy-on-board). LX fares are also often just as low as other carriers. Many of their longhaul routes also depend heavily on 6th freedom connecting traffic via ZRH, just like KL via AMS. Those fares are often much lower than their O&D fares to/from Switzerland.

Even in Switzerland, few passengers are willing to pay a premium to fly LX. Price is the major factor these days which is why EasyJet is now by far the largest operator at GVA with about 40% of the traffic, far ahead of LX which only accounts for about 15% of GVA passengers.
 
lhcvg
Posts: 1255
Joined: Mon May 25, 2009 2:53 pm

RE: Swiss To Folllow Lufthansa Low Cost Strategy?

Mon Sep 24, 2012 9:05 pm

Quoting Viscount724 (Reply 14):

I'll admit the LX intra-Europe stuff I don't know about, but my point is that LX is clearly a little brother to LH in terms of scale that selectively chooses which markets (at least longhaul ones) to serve. Operationally, that helps a lot because when you're not serving every possible destination for connectivity reasons, by definition you'll have much less pressure to keep costs strictly in line. That's why I made an analogy between LH and major U.S. carriers - the sheer number of destinations and routes served is far too large to have a unified product, and there will inevitably be some marginal routes. You need to make up that difference somewhere when you can't as easily bow out of a given market entirely.