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Lufthansa Capital Markets Day - Changes to EW, SN, Update on Fleet Development

Posted: Mon Jun 24, 2019 8:56 am
by seansasLCY
Lufthansa are holding their Capital Markets Day.

Some interesting bits so far:

Brussels Airlines won't become part of Eurowings and Eurowings will focus on short haul flights with the A320 family to reduce costs leaving the long haul market.

https://newsroom.lufthansagroup.com/Eng ... 4c3fbd9fef

LH really doesn't seem to know what to do with Eurowings.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:15 am
by columba
Buying Condor and using the Condor brand for leisure longhaul flights......

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:17 am
by Conti764
seansasLCY wrote:
Lufthansa are holding their Capital Markets Day.

Some interesting bits so far:

Brussels Airlines won't become part of Eurowings and Eurowings will focus on short haul flights with the A320 family to reduce costs leaving the long haul market.

https://newsroom.lufthansagroup.com/Eng ... 4c3fbd9fef

LH really doesn't seem to know what to do with Eurowings.


LH should stop focussing so heavily on competing with true LCC's and maintain a more hybrid model for EW. Take SN for example, since inheriting Thomas Cook Belgium's activities, they have a pretty large leisure operation to touristic destinations. I don't think anyone would object having these kind of flights executed by EW instead. Make money with these operations to make up for the possible losses on the German home market, trying to fend of FR and the likes.

Having SN more aligned with the (other) network carriers from the group is only logical. It's true the company has been struggling ever since its merger with VX, flying around old, thirsty A330's with limited payload capabilities and a unefficiënt European network, relying for many years on Avro's… Brussels isn't the biggest market in aviation, but it isn't some third tier airport neither. It has some pretty large O&D (NATO, EU,...) and a large African diaspora. Give them the means to develop with more efficient aircraft and I'm pretty sure they'll make money for the LH Group. Not on a same level as LHG's crown jewel SWISS but enough to warrant SN being in the network carriers division and not in the LCC division.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:27 am
by aviationaware
So I guess this raises the question how will the leisure long haul be branded, and who will operate it? Does the collective agreement with the Lufthansa pilots allow for Lufthansa branded aircraft to be flown by Sun Express pilots? I strongly doubt it would.

Is there a presentation available?
/e found it:
https://investor-relations.lufthansagro ... ations.pdf

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:35 am
by SKAirbus
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.

Hopefully by aligning them with LH, OS and LX A320NEOs will be forthcoming. I could even see the A321XLR working well for SN in terms of its African and Transatlantic network.

So if they want to align SN more with the other network airlines, does this mean the three class system could disappear? I.e. a return to complimentary snacks and drinks in short haul economy and a proper business class cabin, and doing away with Flex and Fast?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:38 am
by VSMUT
Conti764 wrote:
Give them the means to develop with more efficient aircraft and I'm pretty sure they'll make money for the LH Group.


The aircraft type is irrelevant, going all A350 or 787 wouldn't turn the loses. A330s are by no means inefficient either.

When an airline starts making losses, it is due to much, much bigger underlying issues that a new aircraft can't solve. OTOH, a well run and profitable airline could make money running L1011s and DC-8s.

But I do agree that Brussels' should be able to pull a more premium product. It's also a good hub for connecting flights too, which given LHs recent criticism of Frankfurt should be something they should focus more on.

If it was up to me, they should pretty much just be Lufthansa in all but name and branding. Same onboard service, lounges etc.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:42 am
by sabenapilot
I have to agree with the above: good to see some common sense FINALLY returning to Lufthansa.

SN is nothing like EW and yet LH have been trying for over 18 months now to squeeze a STAR alliance network airline with a exceptionally strong niche market in French speeking Africa into the generic and German-centered EW mold, all with no success of course.

Just reading this single sentence above should already make clear what an idiocracy this idea was, but still Lufthansa tried it for 18 months!
And the irony was they were destroying the best part of what they called "the Eurowings group" with it!
For no obvious reason, since SN was (modestly) profitable over 2018!
Compare that to EW proper!!

Ridiculous strategy from Lufthansa to never have considered further developing the one airline within their portfolio which truly owns a niche longhaul market, in fact!
It's like IAG would not be willing to admit how IB is the logical choice as platform for their South America flights, or try to curtail EI flights to the USA, all to the benefit of BA for instance?!

Other than that, I think EW would do good to indeed focus on just their European sectors and just be a sort of an Easyjet while their long haul routes can be operated by others, like Condor (should they persue the take-over indeed).

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:52 am
by devron
Not unexpected and frankly some of this was so freaking obvious (I think opinions here on a.net on SN as eurowings was generally persived as a pretty stupid idea) and that makes me wonder why so late (stock price droppping like a stone). Condor brand might be an option for the long haul (if they are allowed to merge, maybe only the name). Still even witha more foccused apporach I am not sure in Eurowings can be successfull as the LCC compition will still have lower opperating costs (my assumption).

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 9:53 am
by BrianDromey
sabenapilot wrote:
I have to agree with the above: good to see some common sense FINALLY returning to Lufthansa.


They seem to have realised that SN doesn't really fit into the EW picture. They used EW as the brand to fill as much of the Air Berlin capacity as possible, wet-leasing, dry-leasing and purchasing airlines, doing whatever necessary to grab as much of the market for themselves as they could. Long-Haul, Short-Haul and everything that didn't touch FRA, MUC and ZRH were considered Eurowings territory. There were even talks about OS being consumed. Lets see what they do with the long-haul Eurowings operators, its quite vague. I wonder if the plans depend on the success of buying Condor from the TC group.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 10:08 am
by sabenapilot
devron wrote:
Not unexpected and frankly some of this was so freaking obvious (I think opinions here on a.net on SN as eurowings was generally persived as a pretty stupid idea) and that makes me wonder why so late (stock price droppping like a stone). Condor brand might be an option for the long haul (if they are allowed to merge, maybe only the name). Still even witha more foccused apporach I am not sure in Eurowings can be successfull as the LCC compition will still have lower opperating costs (my assumption).


With al the money wasted on EW already, LH could have just taken the easy way forward and bought (a fair share of) Easyjet instead!!
Especially given all the legal Brexit problems they face, this could even have been structured as a friendly takeover bid.
Would have been much simpler strategy for sure.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 10:21 am
by HaulSudson
SKAirbus wrote:
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.



Until now I assumed there was no tomorrow for SN...

They should market themselves as the Africa specialist within the LH group, and LH ought to direct most Africa travel towards sn/bru. It's where they have a dedicated africa terminal, after all.

And they should work on their erratic pricing, wild swinging between low and high (season) prices .
They can learn a thing or two from EK in this regard.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 10:41 am
by Conti764
VSMUT wrote:
Conti764 wrote:
Give them the means to develop with more efficient aircraft and I'm pretty sure they'll make money for the LH Group.


The aircraft type is irrelevant, going all A350 or 787 wouldn't turn the loses. A330s are by no means inefficient either.

When an airline starts making losses, it is due to much, much bigger underlying issues that a new aircraft can't solve. OTOH, a well run and profitable airline could make money running L1011s and DC-8s.

But I do agree that Brussels' should be able to pull a more premium product. It's also a good hub for connecting flights too, which given LHs recent criticism of Frankfurt should be something they should focus more on.

If it was up to me, they should pretty much just be Lufthansa in all but name and branding. Same onboard service, lounges etc.


You are right about current A330's but keep in mind SN was flying around in some of the oldest Airbusses A330... LH had already started a rollover of SN's fleet with newer SQ-birds.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 11:33 am
by finnishway
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 11:52 am
by BrianDromey
finnishway wrote:
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?

No one knows based on the information revealed so far. LH have said commercial responsibility will transfer to “Network Operations”, that could mean SN, for example, would run Eurowings branded Long Haul operations. Much is probably dependent on what happens with Condor. If LH get the long-haul operation they have a ready-made long-haul leisure brand and operation. Where that leaves SunExpress DE, no-one knows.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 11:52 am
by Lewton
finnishway wrote:
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?


What exactly in the phrase "commercial responsibility for Eurowings long-haul services to be transferred to the Network Organization in future" do you not understand?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 12:19 pm
by blueflyer
Now that Lufthansa’s attempt to use Brussels Airlines to stop losses at Eurowings has failed, maybe they will finally come up with a strategy for the entire airline, not just its African operations. This strikes me as very last-minute though. The first Eurowings-branded A320 for Brussels Airlines was barely delivered in BRU, and there’s no plan yet on how to “embed” Brussels Airlines in the Network Airlines division. As a matter of fact, the slide deck for the Network Airlines presentation does not mention Brussels Airlines at all. The entire presentation reads as though Eurowings decided to dump them and forgot to tell the rest of the group. Details to come at the end of next quarter.

sabenapilot wrote:
I have to agree with the above: good to see some common sense FINALLY returning to Lufthansa.

SN is nothing like EW and yet LH have been trying for over 18 months now to squeeze a STAR alliance network airline with a exceptionally strong niche market in French speeking Africa into the generic and German-centered EW mold, all with no success of course.

That's because current management saw Brussels Airlines as a way to shore up Eurowings, it was a means to an end, not an airline deserving of its own strategy. Still wondering what the outcome will be though.

HaulSudson wrote:
They should market themselves as the Africa specialist within the LH group, and LH ought to direct most Africa travel towards sn/bru.

The strange thing is, Brussels Airlines' skills in Africa are well acknowledged, in-house. Brussels Airlines is responsible for network/strategic decisions regarding Africa for the entire group.

HaulSudson wrote:
It's where they have a dedicated africa terminal, after all.

There is not a dedicated Africa terminal. There are a few hybrid gates at the end of the Schengen terminal that can accommodate non-Schengen flights, with a dedicated Brussels Airlines lounge, and that is where most Africa flights leave from...

SKAirbus wrote:
So if they want to align SN more with the other network airlines, does this mean the three class system could disappear? I.e. a return to complimentary snacks and drinks in short haul economy and a proper business class cabin, and doing away with Flex and Fast?

The Network Airlines division is planning a fare structure that has a common base, with multiple bundles designed to attract specific types of customers (families, business travelers on a budget, premium travelers, etc.). Flex and Fast will go, at least in name.
It would also be nice if mileage bonuses for premium cabin bookings were lined up with the other airlines too.

BrianDromey wrote:
LH have said commercial responsibility will transfer to “Network Operations”, that could mean SN, for example, would run Eurowings branded Long Haul operations.

That is actually the current situation. Brussels operates a few long-haul aircraft for Eurowings (don't remember the details). Eurowings is getting out of long-haul, full stop. Some of its pilots will (re)integrate Lufthansa, so I imagine some long-haul flights will transfer as well.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 12:26 pm
by BestWestern
The sale of LSG is probably the biggest news in the document.

Second is the failure of long haul low cost airline flights.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 12:37 pm
by sabenapilot
I think the future setup of the LH group is going to look a lot like that of IAG:
SN will be what Aer Lingus is to IAG: a network airline with a low cost feel to it on its European routes, feeding a profitable long haul niche network (EI: US / SN:Africa)
EW will just be like Vueling: a point-to-point short haul airline, predominantly flying to and from a few home countries (DE, AT, BE), whereas
the long haul leisure routes of EW will in future be operated by a seperate still-to-be created airline or soon-to-be-bought one (Condor?), very similiar to LEVEL.
Oh, and a far less aggressive growth strategy for the 3 entities combined than foreseen under the single EW plan in order to stem the massive losses, of course.
Done.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 1:00 pm
by A321Lufthansa
SKAirbus wrote:
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.

Hopefully by aligning them with LH, OS and LX A320NEOs will be forthcoming. I could even see the A321XLR working well for SN in terms of its African and Transatlantic network.

So if they want to align SN more with the other network airlines, does this mean the three class system could disappear? I.e. a return to complimentary snacks and drinks in short haul economy and a proper business class cabin, and doing away with Flex and Fast?

Will the Austrian’s announced new 10 A320 be brand new neos or some used ones?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 1:02 pm
by airbazar
seansasLCY wrote:
LH really doesn't seem to know what to do with Eurowings.

Or Brussels Airlines. This latest decision looks more like "kicking the can" than anything else.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 2:30 pm
by stylo777
A321Lufthansa wrote:
SKAirbus wrote:
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.

Hopefully by aligning them with LH, OS and LX A320NEOs will be forthcoming. I could even see the A321XLR working well for SN in terms of its African and Transatlantic network.

So if they want to align SN more with the other network airlines, does this mean the three class system could disappear? I.e. a return to complimentary snacks and drinks in short haul economy and a proper business class cabin, and doing away with Flex and Fast?

Will the Austrian’s announced new 10 A320 be brand new neos or some used ones?

all second-hand; as far as I remember 6 coming this year and 4 next year

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 2:50 pm
by A321Lufthansa
stylo777 wrote:
A321Lufthansa wrote:
SKAirbus wrote:
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.

Hopefully by aligning them with LH, OS and LX A320NEOs will be forthcoming. I could even see the A321XLR working well for SN in terms of its African and Transatlantic network.

So if they want to align SN more with the other network airlines, does this mean the three class system could disappear? I.e. a return to complimentary snacks and drinks in short haul economy and a proper business class cabin, and doing away with Flex and Fast?

Will the Austrian’s announced new 10 A320 be brand new neos or some used ones?

all second-hand; as far as I remember 6 coming this year and 4 next year

I saw that they are coming from January. Are MSNs known already or not yet?
As I understood, all of them will be configured in a way for easy swapping the aircrafts between the group? By the way, what was the reason for introducing new OE-LZ* regs for them instead of continiuing from OE-LXF?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 3:53 pm
by jghealey
SKAirbus wrote:
They really need to get some new aircraft for SN - some of them date back to the Sabena days and drink fuel like there's no tomorrow.

Hopefully by aligning them with LH, OS and LX A320NEOs will be forthcoming. I could even see the A321XLR working well for SN in terms of its African and Transatlantic network.

LHG airlines usually only get new aircraft it they've been profitable enough to justify it; Austrian is getting only a few used A320s and sticking with the ageing 767/777s for longhaul while Swiss and Lufthansa are renewing both fleets with A220, A320neo and B777/A350. While I agree the A340s need to go, the A320s and A330s are relatively efficient. From a passenger perspective the A330 are being refurbished as well so there's really no need at the moment to introduce a new aircraft type when they can simply build on the existing fleet with used aircraft at a considerably lower cost.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 4:19 pm
by nordikcam
A321Lufthansa wrote:
stylo777 wrote:
A321Lufthansa wrote:
Will the Austrian’s announced new 10 A320 be brand new neos or some used ones?

all second-hand; as far as I remember 6 coming this year and 4 next year

I saw that they are coming from January. Are MSNs known already or not yet?
As I understood, all of them will be configured in a way for easy swapping the aircrafts between the group? By the way, what was the reason for introducing new OE-LZ* regs for them instead of continiuing from OE-LXF?


MSN 1085 : OO-SFX / MSN 1010 : OO-SFE / MSN 983 : OO-SFG / MSN 959 : OO-SFD / MSN 915 : OO-SFB / MSN 895 : OO-SFC / MSN 701 : OO-SFJ / MSN 579 : OO-SFL / MSN 570 : OO-SFK.../ MSN 1132 : OO- SFF will enter in service soon ! All ex SQ or CX

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 5:15 pm
by A321Lufthansa
nordikcam wrote:
A321Lufthansa wrote:
stylo777 wrote:
all second-hand; as far as I remember 6 coming this year and 4 next year

I saw that they are coming from January. Are MSNs known already or not yet?
As I understood, all of them will be configured in a way for easy swapping the aircrafts between the group? By the way, what was the reason for introducing new OE-LZ* regs for them instead of continiuing from OE-LXF?


MSN 1085 : OO-SFX / MSN 1010 : OO-SFE / MSN 983 : OO-SFG / MSN 959 : OO-SFD / MSN 915 : OO-SFB / MSN 895 : OO-SFC / MSN 701 : OO-SFJ / MSN 579 : OO-SFL / MSN 570 : OO-SFK.../ MSN 1132 : OO- SFF will enter in service soon ! All ex SQ or CX

How are SN A330s connected with OS A320s?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 5:48 pm
by BestWestern
What happened to the Etihad 330’s they were supposedly taking?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 5:51 pm
by aemoreira1981
columba wrote:
Buying Condor and using the Condor brand for leisure longhaul flights......


With Air Berlin gone and a large part of its short haul swallowed up by the Lufthansa Group, I cannot see a reacquisition of Condor being allowed.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 6:16 pm
by nordikcam
BestWestern wrote:
What happened to the Etihad 330’s they were supposedly taking?


It was never planned to take A 330 from Etihad. Only Cathay and Singapore have issued Airbus A330s ...

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 6:17 pm
by airzona11
BestWestern wrote:
The sale of LSG is probably the biggest news in the document.

Second is the failure of long haul low cost airline flights.


It shows that the airlines are not built around filling the cheap seats. They need the premium cabins on the widebodies filled, that is the money making focus. They can offer Economy Basic on those same planes to thwart the LCCs and also chase the lower end of the paying passengers.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 7:05 pm
by columba
aemoreira1981 wrote:
columba wrote:
Buying Condor and using the Condor brand for leisure longhaul flights......


With Air Berlin gone and a large part of its short haul swallowed up by the Lufthansa Group, I cannot see a reacquisition of Condor being allowed.


Yes, Lufthansa said so today themselves that it is unlikely that they would be allowed to buy Condor back..

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 7:26 pm
by Someone83
Lewton wrote:
finnishway wrote:
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?


What exactly in the phrase "commercial responsibility for Eurowings long-haul services to be transferred to the Network Organization in future" do you not understand?


I can understand the question. It is not clear to me whether it means most/all of Eurowings longhaul operation will be taken over by the network carriers or most will be closed and some of the traffic just transfered to ZRH/FRA/MUC/VIE/BRU?

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 8:16 pm
by marcogr12
Someone83 wrote:
Lewton wrote:
finnishway wrote:
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?


What exactly in the phrase "commercial responsibility for Eurowings long-haul services to be transferred to the Network Organization in future" do you not understand?


I can understand the question. It is not clear to me whether it means most/all of Eurowings longhaul operation will be taken over by the network carriers or most will be closed and some of the traffic just transfered to ZRH/FRA/MUC/VIE/BRU?


Yes that's what i was wondering too..If the latter,will EW give up slots at DUS? Lauda and others will be waiting to grab them

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Mon Jun 24, 2019 10:57 pm
by Texas77
"We (LH) can't operate these long haul routes profitably, so we'll move them over to Eurowings!" And then they are "disappointed" when Eurowings isn't profitable? Silly

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 3:06 am
by eamondzhang
Think it's also interesting that this is (maybe?) the first time they identified that they'll retire Austrian's 772 and 763 fleet. I assume to replace those with the new 789s or A333s.

Michael

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 5:55 am
by Blerg
Ok, SN isn't going away but anyone knows what they plan on doing in order to make it more profitable and efficient? It can't be easy running a hub in Brussels, sandwiched between Amsterdam and Paris with two LCC mega airports just around the corner (CRL and EIN).

So does it mean German airports other than MUC and FRA won't have long-haul flights operated by LH Group airlines? Maybe Norwegian will step in.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 6:08 am
by sabenapilot
Blerg wrote:
Ok, SN isn't going away but anyone knows what they plan on doing in order to make it more profitable and efficient? It can't be easy running a hub in Brussels, sandwiched between Amsterdam and Paris with two LCC mega airports just around the corner (CRL and EIN).


SN has the benefit of holding a very strong and lucrative niche market like no-one else within the LHG: Central Africa.

It's been remarkable how LH has refused to transfer their few Central-African routes to SN in BRU to consolidate all those fligths at the in-house specialist who's most certainly able to operate these flights better and cheaper too!

So far the whole strategy of EW and the LHG and has always been to protect LH proper, rather than to see which airlines within the group can actually do certain flights best: metal neutrality is something the LHG doesn't seem to value greatly, it's clearly "Germany above and before everything else" really.

There are litterally tons of money to be made by simply delocalizing a whole bunch of Lufthansa long haul flights with high volumes of connecting passengers to either BRU or VIE, where the subsidiaries can do the same job just as well, if not better even, much much cheaper. Transfer passengers from the UK, Scandinavia or France won't mind for a second not passing through FRA on their way to Africa or Asia, you know? But so far these logical efficiency gains on a group level have been a clearly marked no-go zone! No wonder those who are left with just crumbs (OS, SN) have a hard time pulling it off: if you're only allowed to touch what LH can not do profitable itself, the target market becomes very small indeed and the margin of profit very narrow to start with even!

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 6:56 am
by LH748
This move would make perfect sense if the end up buying Condor, which is a strong brand in the vacation market and could add some EW destinations to their portfolio. Would be nice to see them in RSW for example.
Keeping EW in the shorthaul LCC market makes sense as it had the potential to interfere too much with the LH longhaul operation.
Happy to see that LH finally realized that SN is a little treasure with its African network. They should help to further develop SN and keep the strong brand.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 8:43 am
by stylo777
pretty sure, there is a professional team working for Spohr and currently very busy analyzing the economics of the XLR until the very cent.
looking from an "armchair ceo" perspective, I try to comment on the current LH and LHGroup airlines network:

North America:
- barely any benefits for LH; the East Coast is pretty much covered from both hubs (FRA/MUC) in different departure waves and diverse selection of city-pairs (e.g. DTW/PHL-FRA, CLT-MUC)
- in general, there is already a lot of TATL capacity within the group; therefore, I don't think the XLR would fit the LX/OS/SN/EW strategies

South America:
- out of range except for the Northern coast, but hardly any positive business case

Africa:
- theoretically, the XLR should have the range until South Africa; anything in between is therefore "easily" reachable. the current business model is mostly based on tag-on flying with LAD, ADD and NBO being the only terminator services. LOS, ABV, PHC and SSG as well as LX to NBO and DAR are tag-on flights. I see some potential here, but than again the underbelly capacity of the XLR is limited compared to the 333.
- no business case for LX and OS; and SN must be seen with recent developments

Middle East:
- the most perfect place actually to send the XLR; those 321CEO's are flying at the limited to places like TLV, EBL, BEY, AMM and CAI. I'm sure they are taking a hit on cargo capacity thus the recent upgauge to 333 at CAI for instance.
- a bit further the picture looks even more promising: KWI, BAH, JED, DMM, RUH could perfectly accommodate the XLR (range wise); however, I doubt the business potential due to the fact of lacking proper business class seating and the "cultural" preferences of the region. I believe, they would be hesitant to fly on a narrow-body just to connect at FRA...
- resumption of flights to AUH, MCT and DOH could be an interesting case
- I guess, LX is doing fine on DXB-MCT with 333 and OS some years ago left DXB. there is no chance to compete with EK anyways

India:
- PNQ is the strongest market ACTUALLY lacking narrowbody capacity. insolvency of Privatair took a great hit on a niche route served for more than 10 years (lucratively...).
- HYD, CCU and GOI are other potentials, but it really stretches the legs of the XLR on full capacity; on an ideal routing there are the most favorable places for inflight diversion
- not India, but Pakistan: some potential with LHE, ISB, KHI, but politics play a major role in this decision
- again, for LX/OS/SN I personally don't see a positive business case in this region

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 10:23 am
by spannacomo
never understood why SN had to be integrated into EW so I guess to let it be a hub and spokes company is a smart move. Apart from that I do not see how EW focus on short haul could help them improve their bottom line. Actually if I have a look at their last traffic report I see short haul is suffering more than long haul, with operations and load factors already shrinking. LH bought AB and while they had some benefits due to less competition on a few shared routes they most of all imported AB problems, they simply are unfit to compete with true LC carriers such as U2 and FR on point to point routes. Focusing on short haul will only cause more pain for them.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 3:02 pm
by Lewton
Someone83 wrote:
Lewton wrote:
finnishway wrote:
What will happen to their longhaul flights from DUS? Will Lufthansa continue to operate them under their own brand?


What exactly in the phrase "commercial responsibility for Eurowings long-haul services to be transferred to the Network Organization in future" do you not understand?


I can understand the question. It is not clear to me whether it means most/all of Eurowings longhaul operation will be taken over by the network carriers or most will be closed and some of the traffic just transfered to ZRH/FRA/MUC/VIE/BRU?


It is a very valid question, but how would anyone be able to answer it give that Lufthansa has not yet said anything?
Everything we know is in the presentation.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 3:16 pm
by Blerg
sabenapilot wrote:
Blerg wrote:
Ok, SN isn't going away but anyone knows what they plan on doing in order to make it more profitable and efficient? It can't be easy running a hub in Brussels, sandwiched between Amsterdam and Paris with two LCC mega airports just around the corner (CRL and EIN).


SN has the benefit of holding a very strong and lucrative niche market like no-one else within the LHG: Central Africa.

It's been remarkable how LH has refused to transfer their few Central-African routes to SN in BRU to consolidate all those fligths at the in-house specialist who's most certainly able to operate these flights better and cheaper too!

So far the whole strategy of EW and the LHG and has always been to protect LH proper, rather than to see which airlines within the group can actually do certain flights best: metal neutrality is something the LHG doesn't seem to value greatly, it's clearly "Germany above and before everything else" really.

There are litterally tons of money to be made by simply delocalizing a whole bunch of Lufthansa long haul flights with high volumes of connecting passengers to either BRU or VIE, where the subsidiaries can do the same job just as well, if not better even, much much cheaper. Transfer passengers from the UK, Scandinavia or France won't mind for a second not passing through FRA on their way to Africa or Asia, you know? But so far these logical efficiency gains on a group level have been a clearly marked no-go zone! No wonder those who are left with just crumbs (OS, SN) have a hard time pulling it off: if you're only allowed to touch what LH can not do profitable itself, the target market becomes very small indeed and the margin of profit very narrow to start with even!


Didn't LH sign a JV with ET? Maybe this is another way for them to reduce their reliance on SN and to make them weaker in Africa? By what you write it would make sense as they could shift some African passengers away from BRU to MUC/FRA. ET also has bases in several African countries.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 3:35 pm
by mxaxai
stylo777 wrote:
North America:
- barely any benefits for LH; the East Coast is pretty much covered from both hubs (FRA/MUC) in different departure waves and diverse selection of city-pairs (e.g. DTW/PHL-FRA, CLT-MUC)
- in general, there is already a lot of TATL capacity within the group; therefore, I don't think the XLR would fit the LX/OS/SN/EW strategies.

- The XLR could allow EW, SN or OS to expand their north american destinations without having to add (more) widebodies. Routes like VIE - BOS or DUS - ORD.
- BA has seen quite some success with smaller US destinations, like MSY, SAN or CHS. LH could use the XLR to fly to PIT, CLE, BWI, MSP and other secondary markets. Most people don't want to double-hub.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 3:43 pm
by Polot
mxaxai wrote:
stylo777 wrote:
North America:
- barely any benefits for LH; the East Coast is pretty much covered from both hubs (FRA/MUC) in different departure waves and diverse selection of city-pairs (e.g. DTW/PHL-FRA, CLT-MUC)
- in general, there is already a lot of TATL capacity within the group; therefore, I don't think the XLR would fit the LX/OS/SN/EW strategies.

- The XLR could allow EW, SN or OS to expand their north american destinations without having to add (more) widebodies. Routes like VIE - BOS or DUS - ORD.
- BA has seen quite some success with smaller US destinations, like MSY, SAN or CHS. LH could use the XLR to fly to PIT, CLE, BWI, MSP and other secondary markets. Most people don't want to double-hub.

Those smaller destinations are always going to be tougher for LH because Germany/Belgium/Switzerland/Austria does not have the same draw as Paris or London from the US. The hubs are the reason those flights operate, but sufficient O&D traffic is still what makes them work.

The A321XLR is of course more efficient, but the traffic numbers are still not there to support multiple TATL flights from many of those cities.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 4:45 pm
by Blerg
mxaxai wrote:
stylo777 wrote:
North America:
- barely any benefits for LH; the East Coast is pretty much covered from both hubs (FRA/MUC) in different departure waves and diverse selection of city-pairs (e.g. DTW/PHL-FRA, CLT-MUC)
- in general, there is already a lot of TATL capacity within the group; therefore, I don't think the XLR would fit the LX/OS/SN/EW strategies.

- The XLR could allow EW, SN or OS to expand their north american destinations without having to add (more) widebodies. Routes like VIE - BOS or DUS - ORD.
- BA has seen quite some success with smaller US destinations, like MSY, SAN or CHS. LH could use the XLR to fly to PIT, CLE, BWI, MSP and other secondary markets. Most people don't want to double-hub.


XLR doesn't make sense for OS, I don't think it could fly to their shortest long-haul destination. Also I doubt LH would be encouraging OS to launch BOS given their horrible financial performance. They need to consolidate what they already have before embarking on yet another adventure.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 5:34 pm
by Conti764
Blerg wrote:
sabenapilot wrote:
Blerg wrote:
Ok, SN isn't going away but anyone knows what they plan on doing in order to make it more profitable and efficient? It can't be easy running a hub in Brussels, sandwiched between Amsterdam and Paris with two LCC mega airports just around the corner (CRL and EIN).


SN has the benefit of holding a very strong and lucrative niche market like no-one else within the LHG: Central Africa.

It's been remarkable how LH has refused to transfer their few Central-African routes to SN in BRU to consolidate all those fligths at the in-house specialist who's most certainly able to operate these flights better and cheaper too!

So far the whole strategy of EW and the LHG and has always been to protect LH proper, rather than to see which airlines within the group can actually do certain flights best: metal neutrality is something the LHG doesn't seem to value greatly, it's clearly "Germany above and before everything else" really.

There are litterally tons of money to be made by simply delocalizing a whole bunch of Lufthansa long haul flights with high volumes of connecting passengers to either BRU or VIE, where the subsidiaries can do the same job just as well, if not better even, much much cheaper. Transfer passengers from the UK, Scandinavia or France won't mind for a second not passing through FRA on their way to Africa or Asia, you know? But so far these logical efficiency gains on a group level have been a clearly marked no-go zone! No wonder those who are left with just crumbs (OS, SN) have a hard time pulling it off: if you're only allowed to touch what LH can not do profitable itself, the target market becomes very small indeed and the margin of profit very narrow to start with even!


Didn't LH sign a JV with ET? Maybe this is another way for them to reduce their reliance on SN and to make them weaker in Africa? By what you write it would make sense as they could shift some African passengers away from BRU to MUC/FRA. ET also has bases in several African countries.


Apparantly not. LH only mentions JV's with UA and AC, one with ANA and one with SQ.

It wouldn't make sense since even in a JV with ET, LH would have to share profits whereas all profits would stay in house if they'd rely on SN.

Let's not jump to conclusions. LH realised its mistake by trying to integrate SN into EW. Now it's up to SN to show what they can do and to convince LH the company is worth investing in.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 5:54 pm
by mxaxai
Blerg wrote:
mxaxai wrote:
stylo777 wrote:
North America:
- barely any benefits for LH; the East Coast is pretty much covered from both hubs (FRA/MUC) in different departure waves and diverse selection of city-pairs (e.g. DTW/PHL-FRA, CLT-MUC)
- in general, there is already a lot of TATL capacity within the group; therefore, I don't think the XLR would fit the LX/OS/SN/EW strategies.

- The XLR could allow EW, SN or OS to expand their north american destinations without having to add (more) widebodies. Routes like VIE - BOS or DUS - ORD.
- BA has seen quite some success with smaller US destinations, like MSY, SAN or CHS. LH could use the XLR to fly to PIT, CLE, BWI, MSP and other secondary markets. Most people don't want to double-hub.


XLR doesn't make sense for OS, I don't think it could fly to their shortest long-haul destination. Also I doubt LH would be encouraging OS to launch BOS given their horrible financial performance. They need to consolidate what they already have before embarking on yet another adventure.

That's the point of the XLR. It's not an adventure, it's just a longer-range version of a type they already operate. And given the small size and fairly good efficiency, it doesn't need super strong passenger demand. Instead of opening new routes, it could also be used to downgauge existing routes. VIE-ORD and VIE-JFK/EWR should be within range.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 7:41 pm
by fraT
Conti764 wrote:
Blerg wrote:
sabenapilot wrote:

SN has the benefit of holding a very strong and lucrative niche market like no-one else within the LHG: Central Africa.

It's been remarkable how LH has refused to transfer their few Central-African routes to SN in BRU to consolidate all those fligths at the in-house specialist who's most certainly able to operate these flights better and cheaper too!

So far the whole strategy of EW and the LHG and has always been to protect LH proper, rather than to see which airlines within the group can actually do certain flights best: metal neutrality is something the LHG doesn't seem to value greatly, it's clearly "Germany above and before everything else" really.

There are litterally tons of money to be made by simply delocalizing a whole bunch of Lufthansa long haul flights with high volumes of connecting passengers to either BRU or VIE, where the subsidiaries can do the same job just as well, if not better even, much much cheaper. Transfer passengers from the UK, Scandinavia or France won't mind for a second not passing through FRA on their way to Africa or Asia, you know? But so far these logical efficiency gains on a group level have been a clearly marked no-go zone! No wonder those who are left with just crumbs (OS, SN) have a hard time pulling it off: if you're only allowed to touch what LH can not do profitable itself, the target market becomes very small indeed and the margin of profit very narrow to start with even!


Didn't LH sign a JV with ET? Maybe this is another way for them to reduce their reliance on SN and to make them weaker in Africa? By what you write it would make sense as they could shift some African passengers away from BRU to MUC/FRA. ET also has bases in several African countries.


Apparantly not. LH only mentions JV's with UA and AC, one with ANA and one with SQ.

It wouldn't make sense since even in a JV with ET, LH would have to share profits whereas all profits would stay in house if they'd rely on SN.

Let's not jump to conclusions. LH realised its mistake by trying to integrate SN into EW. Now it's up to SN to show what they can do and to convince LH the company is worth investing in.


There's another JV with Air China.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 10:55 pm
by danipawa
According to a Capital Markets Day presentation, by 2025, the Group plans to retire the following types from service:

B747-400s: thirteen in service at Lufthansa;
B777-200(ER)s: six in service at Austrian Airlines;
A340-600s: seventeen in service at Lufthansa;
A340-300s: ten in service at Lufthansa, five in service at Lufthansa CityLine, two in service at Brussels Airlines, five in service at Swiss, and four in service at Edelweiss Air;
A330-200s: seven in service at SunExpress Deutschland, four in service at Brussels Airlines;
B767-300(ER)s: six in service at Austrian;
MD-11(F)s: twelve in service at Lufthansa Cargo.

As such, by 2025, Lufthansa Group's widebody fleet will entail the following types:

A380-800s: fourteen currently in service for Lufthansa but which were previously slated to be retired in 2022/3;
B747-8s: nineteen currently in service for Lufthansa;
B777-9s: due for delivery;
B777-300(ER)s: ten currently in service for Swiss;
A350-900s: fourteen currently in service for Lufthansa;
A330-300s: sixteen currently in service for Lufthansa, twelve currently in service for Brussels Airlines; fourteen currently in service for Swiss, and two currently in service for Edelweiss;
B777-Fs: seven currently in service for Lufthansa Cargo;
B787-9s: on order but no destination carrier(s) specified as yet.

https://www.ch-aviation.com/portal/news ... -thru-2025


Looks like B789 going to Austrian (B777/767), SunExpress (A330) and Edelweiss (A330/340), A350 to LH for A346, 343, 330 and maybe Brussels

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Tue Jun 25, 2019 10:59 pm
by jbs2886
danipawa wrote:
According to a Capital Markets Day presentation, by 2025, the Group plans to retire the following types from service:

B747-400s: thirteen in service at Lufthansa;
B777-200(ER)s: six in service at Austrian Airlines;
A340-600s: seventeen in service at Lufthansa;
A340-300s: ten in service at Lufthansa, five in service at Lufthansa CityLine, two in service at Brussels Airlines, five in service at Swiss, and four in service at Edelweiss Air;
A330-200s: seven in service at SunExpress Deutschland, four in service at Brussels Airlines;
B767-300(ER)s: six in service at Austrian;
MD-11(F)s: twelve in service at Lufthansa Cargo.

As such, by 2025, Lufthansa Group's widebody fleet will entail the following types:

A380-800s: fourteen currently in service for Lufthansa but which were previously slated to be retired in 2022/3;
B747-8s: nineteen currently in service for Lufthansa;
B777-9s: due for delivery;
B777-300(ER)s: ten currently in service for Swiss;
A350-900s: fourteen currently in service for Lufthansa;
A330-300s: sixteen currently in service for Lufthansa, twelve currently in service for Brussels Airlines; fourteen currently in service for Swiss, and two currently in service for Edelweiss;
B777-Fs: seven currently in service for Lufthansa Cargo;
B787-9s: on order but no destination carrier(s) specified as yet.

https://www.ch-aviation.com/portal/news ... -thru-2025


Looks like B789 going to Austrian (B777/767), SunExpress (A330) and Edelweiss (A330/340), A350 to LH for A346, 343, 330 and maybe Brussels


Considerin that SunExpress Deutschland is operating Eurowings long-haul, which is transferring to "network carriers," I would not anticipate any 789s there.

Re: Lufthansa Capital Markets Day - Changes to EW, SN

Posted: Wed Jun 26, 2019 3:09 am
by Jetty
danipawa wrote:
According to a Capital Markets Day presentation, by 2025, the Group plans to retire the following types from service:

B747-400s: thirteen in service at Lufthansa;
B777-200(ER)s: six in service at Austrian Airlines;
A340-600s: seventeen in service at Lufthansa;
A340-300s: ten in service at Lufthansa, five in service at Lufthansa CityLine, two in service at Brussels Airlines, five in service at Swiss, and four in service at Edelweiss Air;
A330-200s: seven in service at SunExpress Deutschland, four in service at Brussels Airlines;
B767-300(ER)s: six in service at Austrian;
MD-11(F)s: twelve in service at Lufthansa Cargo.

As such, by 2025, Lufthansa Group's widebody fleet will entail the following types:

A380-800s: fourteen currently in service for Lufthansa but which were previously slated to be retired in 2022/3;
B747-8s: nineteen currently in service for Lufthansa;
B777-9s: due for delivery;
B777-300(ER)s: ten currently in service for Swiss;
A350-900s: fourteen currently in service for Lufthansa;
A330-300s: sixteen currently in service for Lufthansa, twelve currently in service for Brussels Airlines; fourteen currently in service for Swiss, and two currently in service for Edelweiss;
B777-Fs: seven currently in service for Lufthansa Cargo;
B787-9s: on order but no destination carrier(s) specified as yet.

https://www.ch-aviation.com/portal/news ... -thru-2025


Looks like B789 going to Austrian (B777/767), SunExpress (A330) and Edelweiss (A330/340), A350 to LH for A346, 343, 330 and maybe Brussels

A350 to SN seems very unlogical to me. Their A330’s currently fly many triangle routes because single destinations can’t profitable fill a plane. If anything, they need the 787.