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Blerg
Posts: 4426
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 2:44 pm

ethernal wrote:
Blerg wrote:
ethernal wrote:

I was obviously talking about their intra-EU product, not their long haul product. I fly LH regularly internationally.

Their intra-EU product is absolute garbage. It is a LCC product. Having a flight attendant throw a cold sandwich to me doesn't make up for the terrible hard product. I'm 6' 4". 30" pitch being the only option is just not going to work.

Agree that there is a network piece here, but if I am paying for connectivity, why are they trying to compete with a non-differentiated product? The reality is that I am going to take the nonstop once a day easyJet flight than try to take the (more expensive) connect-in-FRA/MUC and have to deal with not just one but TWO legs of miserable LCC product (because that is what intra-EU LH is - it is a LCC product and don't try to pretend it is not).


Excuse me but what do you expect from LH? Do you want them to serve caviar and champagne in economy class? Furthermore, you seem to be missing the point, Lufthansa mainline doesn't seem to be the issue for LH Group, it's rather Eurowings, it's LCC branch and Austrian Airlines.


No, I want the opposite. Why would I want cavier and champagne while I am sitting in a 30" ultra-slimline seat? Drop the pathetic attempt at catering food and put in real seats. Not ultra-slimline, have 31" in economy, and have a 34" legroom section. I'm even fine with not having US domestic-F-like product - I get it, it doesn't work in Europe.

At the end of the day, hard product does matter. A Lufthansa intra-EU flight is not comfortable. Full stop. If I am not going to be comfortable, giving me champagne is further down the list of my worries. And if my decision is 'not comfortable' vs 'not comfortable, except maybe with a sandwich worth 1 euro', you're darn right I'm going to purchase based on price.


You are ranting, ok, you don't like LH's product, fine. However you seem to be missing the point, LH Group didn't lose all that money because of Lufthansa Mainline so people don't seem to be bothered by the same things you are.
 
ethernal
Posts: 383
Joined: Mon May 06, 2019 12:09 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 2:55 pm

Blerg wrote:
ethernal wrote:
Blerg wrote:

Excuse me but what do you expect from LH? Do you want them to serve caviar and champagne in economy class? Furthermore, you seem to be missing the point, Lufthansa mainline doesn't seem to be the issue for LH Group, it's rather Eurowings, it's LCC branch and Austrian Airlines.


No, I want the opposite. Why would I want cavier and champagne while I am sitting in a 30" ultra-slimline seat? Drop the pathetic attempt at catering food and put in real seats. Not ultra-slimline, have 31" in economy, and have a 34" legroom section. I'm even fine with not having US domestic-F-like product - I get it, it doesn't work in Europe.

At the end of the day, hard product does matter. A Lufthansa intra-EU flight is not comfortable. Full stop. If I am not going to be comfortable, giving me champagne is further down the list of my worries. And if my decision is 'not comfortable' vs 'not comfortable, except maybe with a sandwich worth 1 euro', you're darn right I'm going to purchase based on price.


You are ranting, ok, you don't like LH's product, fine. However you seem to be missing the point, LH Group didn't lose all that money because of Lufthansa Mainline so people don't seem to be bothered by the same things you are.


I could be wrong, but I can't find anything in their financials where Lufthansa breaks out profitability of their domestic (Intra-EU) operations versus international ops. I can almost guarantee you that Lufthansa domestic operations are losing money left and right, only partially cross-subsidized by their international connections.

The European majors fetish with creating their own LCC competitors (e.g., Joon, Eurowings, etc) is doomed to failure. They will not out-compete true LCC that don't have the burden of being appendaged to a major.

You can call it a rant, but it is just an expression of a fact. Their intra-EU business strategy is an absolute mess and will continue to bleed money - whether that is through their "true" LCC brands or their "in practice" LCC product they deliver on their mainline brands.

As a comparison, it is the same mistake American Airlines is close to making with their domestic products. They are going to get dangerously caught in the middle - delivering a marginal product not really much better than a LCC with a significantly higher cost basis than its competitors.
 
Delta777Jet
Posts: 1465
Joined: Tue Jun 13, 2000 6:19 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 3:09 pm

Never understood why the European airlines, except TK, can`t fly with a proper business class. I`m sure also in Europe people would pay a premium, may be even more than today`s business class prices to fly in comfort. Why this works everywhere else in the world, except in Europe ? Imagine paying a few thousand Euros for a 4-5 hours flight in Business Class to end up in a regular economy seat. I think Lufthansa is doing this to many N. African and Russian destinations and I think it was even Lufthansa which introduced the Euro Business Class seat to Europe many years ago and then everyone else followed ?
I still miss Trans World Airlines and the L-1011
 
LH779
Posts: 115
Joined: Sun Jun 21, 2015 9:31 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 3:38 pm

ethernal wrote:
No, I want the opposite. Why would I want cavier and champagne while I am sitting in a 30" ultra-slimline seat? Drop the pathetic attempt at catering food and put in real seats. Not ultra-slimline, have 31" in economy, and have a 34" legroom section. I'm even fine with not having US domestic-F-like product - I get it, it doesn't work in Europe.


They could have a large 34" section in the front, that could be used for business class or extra legroom economy seats depending on the amount of business tickets sold. That way you can keep the flexible business/eco cabins. Reserve extra legroom economy for like 50€ or for free if you're Star Gold. 31" (or 30", I don't really mind LH's current seat) regular eco in the back and you have at least the option of a slightly better than LCC experience.
 
ewt340
Posts: 1310
Joined: Tue Jul 10, 2012 7:22 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 4:16 pm

Blerg wrote:
ewt340 wrote:
It seems like LH Group need to realized that LCC is the way forward for Domestic and Regional Flights.

It's been proven over and over again that Majority of passengers want cheaper fares for short flights, sometimes even on longer flights. They don't want free drinks and Cold turkey sandwich that add €50 to their ticket prices. Majority of flights in Europe are extremely short anyway.

They need to properly expand Eurowings and actually convert the aircraft with LCC configuration. How come Eurowings A320 have less seats compared to Austrian's A320.
Rather, they need to cut down capacity of these Full Service airlines and expand the LCC especially for domestic and regional flights between Europe.


Yet Eurowings, an LCC, is the biggest problem for LH Group and they are bleeding money. So not so sure about your idea of transforming LH and LX into typical LCCs especially not if they are currently making money.


Of course they keep losing money, the configurations for many of their aircrafts, especially the wet-leased one are terrible.

I never said that they should transformed LH or LX into LCC even though their A320neo have the same configs as other LCC already. I said that they need to fix Eurowings and take over some unprofitable routes like the one in Vienna and cut capacity for unprofitable airlines like Austrian by using smaller aircraft instead.

They also need to counter Airlines like EasyJet and Ryanair. They could:

A. Let it be and keep complaining.
B. Cashing in the LCC growth by creating a profitable LCC on their own.

For me, that's the only logical thing to do.
 
tobsw
Posts: 146
Joined: Mon Jul 11, 2011 2:29 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 4:23 pm

Delta777Jet wrote:
Never understood why the European airlines, except TK, can`t fly with a proper business class. I`m sure also in Europe people would pay a premium, may be even more than today`s business class prices to fly in comfort. Why this works everywhere else in the world, except in Europe ? Imagine paying a few thousand Euros for a 4-5 hours flight in Business Class to end up in a regular economy seat. I think Lufthansa is doing this to many N. African and Russian destinations and I think it was even Lufthansa which introduced the Euro Business Class seat to Europe many years ago and then everyone else followed ?


Easy. If you have a different seat, then you could never sell 15 rows of ¨Business Class¨ in intra-europe flights. It´s the loss of potential revenue - that´s the key!
 
ewt340
Posts: 1310
Joined: Tue Jul 10, 2012 7:22 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 4:30 pm

RvA wrote:
ethernal wrote:
ewt340 wrote:
It seems like LH Group need to realized that LCC is the way forward for Domestic and Regional Flights.

It's been proven over and over again that Majority of passengers want cheaper fares for short flights, sometimes even on longer flights. They don't want free drinks and Cold turkey sandwich that add €50 to their ticket prices. Majority of flights in Europe are extremely short anyway.

They need to properly expand Eurowings and actually convert the aircraft with LCC configuration. How come Eurowings A320 have less seats compared to Austrian's A320.
Rather, they need to cut down capacity of these Full Service airlines and expand the LCC especially for domestic and regional flights between Europe.


I agree and disagree.

LCC will make up the bulk of the European market. But Lufthansa will never be able to compete with them due to their higher cost base. So they either need to exit intra-EU flying and figure out code-shares with a true LCC (aka not Germanwings) or they need to actually differentiate their product.

I have no desire to fly Lufthansa over a LCC. Why? Because their service is like a LCC. Their seats are ultra-slimline, their pitch - even in the fake Euro-J product with blocked middle seats - is 30 inches. I can fly Easyjet and pay up to extra legroom seats for less than a LH ticket. Why would I ever fly LH?

If LH actually provided at least the OPTION to buy a decent seat - and no, Euro-J is not a decent seat - then I'd fly them over a LCC. But honestly the experience on a LH flight is worse than a LCC. The idea that they can charge any sort of market premium when they deliver a product just as bad - if not worse - than a LCC is an absurd supposition.

I am taking an extended vacation in Europe this fall. I am flying exclusively easyJet over any of the legacies (despite having top tier alliance status on both StarAlliance and SkyTeam airlines). Why? Because I could get a nonstop ticket on easyJet, pay for a checked bag that I would have gotten complementary on the legacies, pay for priority boarding, AND pay for the extra legroom seats all for a lower cost than a LH, AF, or AZ ticket. Why would I ever choose them?


I fly around Europe all the time and EasyJet has not proven much cheaper for me at all. Depends on time, route etc. I found J seats on a few flights on the legacies at a reasonable price so happily accepting the euro J people like to talk crap about. If the price is right, a blocked middle seat, meal, drinks and the extra luggage makes perfect sense for my needs. On a 1 hour flight? Not worth it, though I got an upgrade on LHR-AMS on BA once for about $40 and I ate and drank my money’s worth in the lounge.

Absolutely nonsensical to say nobody wants a sandwich in eco like some people have. You cannot speak for everyone. Seen it hundreds of times being well appreciated along with the free drink (incl beer & wine). LHG has had a tough first half (how is Ryanair doing?) this year but they will
Bounce back. Armchair CEOs here always know best :-)


You are saying that while many Legacy airlines around Europe lose tons of money, and the fact that Ryanair and Easyjet are the 2nd and 5th largest airlines in Europe. Just step back and think about it for a minute there.

Ask any sane person out there. Would they pay 30-50 euro extra to get extra cold sandwich and drink on a 2 hour flight. Or they rather fly on LCC?
Don't forget to tell them that the legroom are the same.
 
fraT
Posts: 1174
Joined: Wed Oct 01, 2003 4:32 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 4:38 pm

ewt340 wrote:

Of course they keep losing money, the configurations for many of their aircrafts, especially the wet-leased one are terrible.

I never said that they should transformed LH or LX into LCC even though their A320neo have the same configs as other LCC already. I said that they need to fix Eurowings and take over some unprofitable routes like the one in Vienna and cut capacity for unprofitable airlines like Austrian by using smaller aircraft instead.

They also need to counter Airlines like EasyJet and Ryanair. They could:

A. Let it be and keep complaining.
B. Cashing in the LCC growth by creating a profitable LCC on their own.

For me, that's the only logical thing to do.


There was a report a just yesterday in German TV showing how Ryanair is hiring/employing their staff. Nearly nobody is directly employed with them but rather via some in between companies or some sort of self employment. They compared the wages from a new hire FA at LH (who earn approx. EUR 3000 before taxation) with those at Ryanair who end up with EUR 1400 before taxes, But this amount is based on their performance with inflight sales. This pretty much sums up why a heavily unionized LH will never be able to compete with the Ryanair and Co. who still do everything to avoid bringing in unions or works councils but rather rely on young FAs from Eastern European countries who don't have the cost of living in Germany.

I totally agree with those who are saying, that LH needs a long term strategy for EW in order to make profits.The last couple of years have been pretty chaotic in this area. Of course absorbing a lot of AB planes and crew made it more complicated but that should be finalized soon.
 
Blerg
Posts: 4426
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 5:16 pm

ewt340 wrote:
Blerg wrote:
ewt340 wrote:
It seems like LH Group need to realized that LCC is the way forward for Domestic and Regional Flights.

It's been proven over and over again that Majority of passengers want cheaper fares for short flights, sometimes even on longer flights. They don't want free drinks and Cold turkey sandwich that add €50 to their ticket prices. Majority of flights in Europe are extremely short anyway.

They need to properly expand Eurowings and actually convert the aircraft with LCC configuration. How come Eurowings A320 have less seats compared to Austrian's A320.
Rather, they need to cut down capacity of these Full Service airlines and expand the LCC especially for domestic and regional flights between Europe.


Yet Eurowings, an LCC, is the biggest problem for LH Group and they are bleeding money. So not so sure about your idea of transforming LH and LX into typical LCCs especially not if they are currently making money.


Of course they keep losing money, the configurations for many of their aircrafts, especially the wet-leased one are terrible.

I never said that they should transformed LH or LX into LCC even though their A320neo have the same configs as other LCC already. I said that they need to fix Eurowings and take over some unprofitable routes like the one in Vienna and cut capacity for unprofitable airlines like Austrian by using smaller aircraft instead.

They also need to counter Airlines like EasyJet and Ryanair. They could:

A. Let it be and keep complaining.
B. Cashing in the LCC growth by creating a profitable LCC on their own.

For me, that's the only logical thing to do.


But that's the thing, LH tried to create a profitable LCC on their own and it went horribly wrong. Maybe the biggest challenge to legacy carriers is the mindset, they have been operating under certain conditions for years now and all of a sudden they need to reconfigure their mind and to think completely differently. Their model doesn't necessarily have to be flawed, LH can be extremely successful if it only concentrated on major hubs. If they can't make the LCC segment work then they should best abandon it.

As for LCCs, it's not only about legroom or cold sandwiches, it also has to do with the general attitude towards customers. Legacies treat their customers with respect exactly because they know how much they need them, LCCs know they don't have to because they'll be back as long as tickets remain cheap... which is a major challenge for them when looking at things long-term. There is a reason why people are willing to pay 300 Euros to fly on LH which they would only do that with LCCs if they have no other choice.

I live between two cities that are some 02.20 flight time away from each other and those cities are linked by a legacy and Wizz Air. I never fly on Wizz because the legacy carrier is always on the airbridge, boarding is much more civilized, inflight experience is far more superior and when sh*t hits the fan they are there for me. Wizz Air? Not so much.

At the end of the day I think both legacies and LCCs have their own respective markets in Europe and I think both will survive. As for LH, their biggest problem is that they expanded way too quickly outside their comfort zone, now they are paying for it. At the end of the day I think they'll be fine and EW is the only aspect of their business that worries me. OS will be fine once the situation in VIE calms down.
 
airbazar
Posts: 10220
Joined: Wed Sep 10, 2003 11:12 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 5:21 pm

Delta777Jet wrote:
Never understood why the European airlines, except TK, can`t fly with a proper business class. I`m sure also in Europe people would pay a premium, may be even more than today`s business class prices to fly in comfort. Why this works everywhere else in the world, except in Europe ? Imagine paying a few thousand Euros for a 4-5 hours flight in Business Class to end up in a regular economy seat. I think Lufthansa is doing this to many N. African and Russian destinations and I think it was even Lufthansa which introduced the Euro Business Class seat to Europe many years ago and then everyone else followed ?

You unknowingly answered your own question. There are very few 4-5 hour flights in Europe :) With FRA and MUC being in the center of Europe, LH finds itself with very few long routes. IIRC correctly their average route is ~600nm which is ~2 hours.
The other factor is that most of those 4-5 hour routes are to leisure destinations, not to business destinations so no, people are not willing to pay for it.
Turkey is on the edge of Europe and does have lots of 4-5 hour flights which is why they offer a "proper business class". You will also find "proper business class" on other airlines that fly 4-5 hour flights, typically to Moscow and TelAviv.

I agree with whoever said that intra-Europe on LH is subsidized by long haul. Historically LH has never been profitable (or has been just marginally profitable), in intra-Europe flying so this news is really nothing new. Before the LCC it was the HSR that was taking away their business.
 
Blerg
Posts: 4426
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 5:27 pm

airbazar wrote:
Delta777Jet wrote:
Never understood why the European airlines, except TK, can`t fly with a proper business class. I`m sure also in Europe people would pay a premium, may be even more than today`s business class prices to fly in comfort. Why this works everywhere else in the world, except in Europe ? Imagine paying a few thousand Euros for a 4-5 hours flight in Business Class to end up in a regular economy seat. I think Lufthansa is doing this to many N. African and Russian destinations and I think it was even Lufthansa which introduced the Euro Business Class seat to Europe many years ago and then everyone else followed ?

You unknowingly answered your own question. There are very few 4-5 hour flights in Europe :) With FRA and MUC being in the center of Europe, LH finds itself with very few long routes. IIRC correctly their average route is ~600nm which is ~2 hours.
The other factor is that most of those 4-5 hour routes are to leisure destinations, not to business destinations so no, people are not willing to pay for it.
Turkey is on the edge of Europe and does have lots of 4-5 hour flights which is why they offer a "proper business class". You will also find "proper business class" on other airlines that fly 4-5 hour flights, typically to Moscow and TelAviv.

I agree with whoever said that intra-Europe on LH is subsidized by long haul. Historically LH has never been profitable (or has been just marginally profitable), in intra-Europe flying so this news is really nothing new. Before the LCC it was the HSR that was taking away their business.


Yeah but TK also has many, many flights that are within two hours flying time. Look at their domestic and Balkan network and then there are destinations in Ukraine, the Middle East, North Africa... Maybe it also has to do with a reasonably priced product. LH one is way too overpriced for what you get.
 
Varsity1
Posts: 2249
Joined: Mon May 02, 2016 4:55 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 5:34 pm

fraT wrote:
ewt340 wrote:

Of course they keep losing money, the configurations for many of their aircrafts, especially the wet-leased one are terrible.

I never said that they should transformed LH or LX into LCC even though their A320neo have the same configs as other LCC already. I said that they need to fix Eurowings and take over some unprofitable routes like the one in Vienna and cut capacity for unprofitable airlines like Austrian by using smaller aircraft instead.

They also need to counter Airlines like EasyJet and Ryanair. They could:

A. Let it be and keep complaining.
B. Cashing in the LCC growth by creating a profitable LCC on their own.

For me, that's the only logical thing to do.


There was a report a just yesterday in German TV showing how Ryanair is hiring/employing their staff. Nearly nobody is directly employed with them but rather via some in between companies or some sort of self employment. They compared the wages from a new hire FA at LH (who earn approx. EUR 3000 before taxation) with those at Ryanair who end up with EUR 1400 before taxes, But this amount is based on their performance with inflight sales. This pretty much sums up why a heavily unionized LH will never be able to compete with the Ryanair and Co. who still do everything to avoid bringing in unions or works councils but rather rely on young FAs from Eastern European countries who don't have the cost of living in Germany.

I totally agree with those who are saying, that LH needs a long term strategy for EW in order to make profits.The last couple of years have been pretty chaotic in this area. Of course absorbing a lot of AB planes and crew made it more complicated but that should be finalized soon.


Perhaps Brussels should get off their a** and stop these smoke and mirror employers (FR) from exploiting desperate labor.

It's approaching human trafficing at some levels, yet europeans love it as long as they save 20 euro on a weekend holiday.
 
ewt340
Posts: 1310
Joined: Tue Jul 10, 2012 7:22 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 6:08 pm

Varsity1 wrote:
fraT wrote:
ewt340 wrote:

Of course they keep losing money, the configurations for many of their aircrafts, especially the wet-leased one are terrible.

I never said that they should transformed LH or LX into LCC even though their A320neo have the same configs as other LCC already. I said that they need to fix Eurowings and take over some unprofitable routes like the one in Vienna and cut capacity for unprofitable airlines like Austrian by using smaller aircraft instead.

They also need to counter Airlines like EasyJet and Ryanair. They could:

A. Let it be and keep complaining.
B. Cashing in the LCC growth by creating a profitable LCC on their own.

For me, that's the only logical thing to do.


There was a report a just yesterday in German TV showing how Ryanair is hiring/employing their staff. Nearly nobody is directly employed with them but rather via some in between companies or some sort of self employment. They compared the wages from a new hire FA at LH (who earn approx. EUR 3000 before taxation) with those at Ryanair who end up with EUR 1400 before taxes, But this amount is based on their performance with inflight sales. This pretty much sums up why a heavily unionized LH will never be able to compete with the Ryanair and Co. who still do everything to avoid bringing in unions or works councils but rather rely on young FAs from Eastern European countries who don't have the cost of living in Germany.

I totally agree with those who are saying, that LH needs a long term strategy for EW in order to make profits.The last couple of years have been pretty chaotic in this area. Of course absorbing a lot of AB planes and crew made it more complicated but that should be finalized soon.


Perhaps Brussels should get off their a** and stop these smoke and mirror employers (FR) from exploiting desperate labor.

It's approaching human trafficing at some levels, yet europeans love it as long as they save 20 euro on a weekend holiday.


Actually, they didn't save 20 euro, they PAID 20 euro for the ticket. And we all could see the appeal for that. Again, we all buy cheap goods from H&M, Zara, or Amazon. Knowing that majority of those stuff are made by underage workers who got paid less than 20 euro per week.

So, like it or not, you can't really blame anybody but the passengers can't you?
 
ethernal
Posts: 383
Joined: Mon May 06, 2019 12:09 pm

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 6:25 pm

Blerg wrote:
As for LCCs, it's not only about legroom or cold sandwiches, it also has to do with the general attitude towards customers. Legacies treat their customers with respect exactly because they know how much they need them, LCCs know they don't have to because they'll be back as long as tickets remain cheap... which is a major challenge for them when looking at things long-term. There is a reason why people are willing to pay 300 Euros to fly on LH which they would only do that with LCCs if they have no other choice.

I live between two cities that are some 02.20 flight time away from each other and those cities are linked by a legacy and Wizz Air. I never fly on Wizz because the legacy carrier is always on the airbridge, boarding is much more civilized, inflight experience is far more superior and when sh*t hits the fan they are there for me. Wizz Air? Not so much.


I don't disagree with your point about the reason why people would like to fly LH. LH has to position itself as a premium product, because if they have to compete solely on price, they will lose every time. Others have already pointed out the structural reasons (labor being a big one, but there are others) that mean that LH - including their LCC subsidiaries - face a higher cost base.

The problem is that LH is not effectively differentiating their product. Right now they only have the soft things - you're right, their customer service it a bit better, and IRROPS protection is a ltitle bit stronger but EU regs ensure that all passengers are entitled to some degree of care - so there is less LCC vs. Legacy differentiation in Europe like there is in the US in that regard. I think your boarding comment being more "civilized" is overblown.

That slight benefit only gets so far. Hard product does matter. Soft product is helpful but as an accent to hard product. If the hard product is bad, the soft product only gets you so far.

Their economic achievement is reflective of that. People will only pay so much for a product that is only marginally better than a competitor. I am fortunate enough to be able to pay out of pocket for personal trips for international J (including LH). The product is differentiated and I am willing to pay thousands of extra dollars for that. How telling is it that someone that has the capacity and willingness to pay for premium products chooses a LCC over a supposedly "premium" product? That tells you that LH's domestic product is NOT premium or differentiated. (yes, I realize that different people value things differently, but still - a flight attendant's smile will only get you so far if your rear end and knees hurt after 15 minutes of sitting).

At the end of the day I think both legacies and LCCs have their own respective markets in Europe and I think both will survive. As for LH, their biggest problem is that they expanded way too quickly outside their comfort zone, now they are paying for it. At the end of the day I think they'll be fine and EW is the only aspect of their business that worries me. OS will be fine once the situation in VIE calms down.


I agree that they can co-exist. I just don't think that they can coexist effectively in LH's current model. They will continue to lose their pants in the domestic (intra-EU) market until they change their approach.
 
canmau
Posts: 33
Joined: Fri Jul 06, 2018 11:53 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 7:16 pm

Blerg wrote:
Yeah but TK also has many, many flights that are within two hours flying time. Look at their domestic and Balkan network and then there are destinations in Ukraine, the Middle East, North Africa... Maybe it also has to do with a reasonably priced product. LH one is way too overpriced for what you get.


True, but many of those flights are operated with A320 or B737 family that doesn't have a proper business class. There is still a sizeable fleet of TK aircraft with a similar business class layout to LH in terms of their hard product. They do use a lot of A330s on short flights i.e Bucharest or Athens that for sure have the proper business class, but on their single-aisle aircraft in Balkan and Domestic flights, it's definitely not guaranteed to get a proper business class.
 
Blerg
Posts: 4426
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 7:20 pm

canmau wrote:
Blerg wrote:
Yeah but TK also has many, many flights that are within two hours flying time. Look at their domestic and Balkan network and then there are destinations in Ukraine, the Middle East, North Africa... Maybe it also has to do with a reasonably priced product. LH one is way too overpriced for what you get.


True, but many of those flights are operated with A320 or B737 family that doesn't have a proper business class. There is still a sizeable fleet of TK aircraft with a similar business class layout to LH in terms of their hard product. They do use a lot of A330s on short flights i.e Bucharest or Athens that for sure have the proper business class, but on their single-aisle aircraft in Balkan and Domestic flights, it's definitely not guaranteed to get a proper business class.


Actually I think most, if not all, TK narrowbodies are equipped with a dedicated business class product. Maybe you are confusing them with Sun Express or Anadoloujet which are flying around in an all economy class configuration.

https://www.seatguru.com/airlines/Turki ... mation.php
 
Blerg
Posts: 4426
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 7:24 pm

ethernal wrote:
Blerg wrote:
As for LCCs, it's not only about legroom or cold sandwiches, it also has to do with the general attitude towards customers. Legacies treat their customers with respect exactly because they know how much they need them, LCCs know they don't have to because they'll be back as long as tickets remain cheap... which is a major challenge for them when looking at things long-term. There is a reason why people are willing to pay 300 Euros to fly on LH which they would only do that with LCCs if they have no other choice.

I live between two cities that are some 02.20 flight time away from each other and those cities are linked by a legacy and Wizz Air. I never fly on Wizz because the legacy carrier is always on the airbridge, boarding is much more civilized, inflight experience is far more superior and when sh*t hits the fan they are there for me. Wizz Air? Not so much.


I don't disagree with your point about the reason why people would like to fly LH. LH has to position itself as a premium product, because if they have to compete solely on price, they will lose every time. Others have already pointed out the structural reasons (labor being a big one, but there are others) that mean that LH - including their LCC subsidiaries - face a higher cost base.

The problem is that LH is not effectively differentiating their product. Right now they only have the soft things - you're right, their customer service it a bit better, and IRROPS protection is a ltitle bit stronger but EU regs ensure that all passengers are entitled to some degree of care - so there is less LCC vs. Legacy differentiation in Europe like there is in the US in that regard. I think your boarding comment being more "civilized" is overblown.

That slight benefit only gets so far. Hard product does matter. Soft product is helpful but as an accent to hard product. If the hard product is bad, the soft product only gets you so far.

Their economic achievement is reflective of that. People will only pay so much for a product that is only marginally better than a competitor. I am fortunate enough to be able to pay out of pocket for personal trips for international J (including LH). The product is differentiated and I am willing to pay thousands of extra dollars for that. How telling is it that someone that has the capacity and willingness to pay for premium products chooses a LCC over a supposedly "premium" product? That tells you that LH's domestic product is NOT premium or differentiated. (yes, I realize that different people value things differently, but still - a flight attendant's smile will only get you so far if your rear end and knees hurt after 15 minutes of sitting).

At the end of the day I think both legacies and LCCs have their own respective markets in Europe and I think both will survive. As for LH, their biggest problem is that they expanded way too quickly outside their comfort zone, now they are paying for it. At the end of the day I think they'll be fine and EW is the only aspect of their business that worries me. OS will be fine once the situation in VIE calms down.


I agree that they can co-exist. I just don't think that they can coexist effectively in LH's current model. They will continue to lose their pants in the domestic (intra-EU) market until they change their approach.


At the end of the day I think LH hoped that it could get away with all this and that they would set up EW which would simply take over AB's role in Germany and that it would print money for them. It didn't take long before they realized things weren't turning out the way they hoped.
I am sure they never expected such a mess to happen. With OS and EW being the cancerous parts of LH Group it only makes sense for them to be the priority. I am sure down the road they will have to figure out how to further consolidate LH mainline and that is where an improved onboard product/experience will come into play. Personally I think they need to improve the legroom on their long-haul fleet as spending 10 hours in a plane with a 30' pitch is not fantastic and is definitely not 5 star material.
 
canmau
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 8:55 pm

Blerg wrote:
Actually I think most, if not all, TK narrowbodies are equipped with a dedicated business class product. Maybe you are confusing them with Sun Express or Anadoloujet which are flying around in an all economy class configuration.

https://www.seatguru.com/airlines/Turki ... mation.php


I've been on several B738s, A320s, and A321s as well within the past two years that had the "eurobusiness" type seating. Flights within that time period I've been on with aircraft with this business seating include Belgrade, Salzburg, Antalya, and Adana from IST. AnadoluJet and Sunexpress both don't fly out of IST (regularly that I'm aware at least).
 
fraT
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 9:18 pm

Just read the news that Ryanair is discontinuing the CGN-SXF route with the start of the winter flight plan. This is the last intra German route for them and they are competing with EW and U2 (which are flying to TXL).
This O&D is the biggest German one in terms of pax since there is a huge amount of Government travel.

Source (in German): http://www.airliners.de/ryanair-verbindung-berlin-schoenefeld-koeln/51205
Last edited by fraT on Thu Aug 01, 2019 9:35 pm, edited 1 time in total.
 
Blerg
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Thu Aug 01, 2019 9:28 pm

canmau wrote:
Blerg wrote:
Actually I think most, if not all, TK narrowbodies are equipped with a dedicated business class product. Maybe you are confusing them with Sun Express or Anadoloujet which are flying around in an all economy class configuration.

https://www.seatguru.com/airlines/Turki ... mation.php


I've been on several B738s, A320s, and A321s as well within the past two years that had the "eurobusiness" type seating. Flights within that time period I've been on with aircraft with this business seating include Belgrade, Salzburg, Antalya, and Adana from IST. AnadoluJet and Sunexpress both don't fly out of IST (regularly that I'm aware at least).


Belgrade gets planes with dedicated business class, that I know for a fact. The one you were on was probably a one off.
 
RvA
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 6:20 am

ewt340 wrote:
RvA wrote:
ethernal wrote:

I agree and disagree.

LCC will make up the bulk of the European market. But Lufthansa will never be able to compete with them due to their higher cost base. So they either need to exit intra-EU flying and figure out code-shares with a true LCC (aka not Germanwings) or they need to actually differentiate their product.

I have no desire to fly Lufthansa over a LCC. Why? Because their service is like a LCC. Their seats are ultra-slimline, their pitch - even in the fake Euro-J product with blocked middle seats - is 30 inches. I can fly Easyjet and pay up to extra legroom seats for less than a LH ticket. Why would I ever fly LH?

If LH actually provided at least the OPTION to buy a decent seat - and no, Euro-J is not a decent seat - then I'd fly them over a LCC. But honestly the experience on a LH flight is worse than a LCC. The idea that they can charge any sort of market premium when they deliver a product just as bad - if not worse - than a LCC is an absurd supposition.

I am taking an extended vacation in Europe this fall. I am flying exclusively easyJet over any of the legacies (despite having top tier alliance status on both StarAlliance and SkyTeam airlines). Why? Because I could get a nonstop ticket on easyJet, pay for a checked bag that I would have gotten complementary on the legacies, pay for priority boarding, AND pay for the extra legroom seats all for a lower cost than a LH, AF, or AZ ticket. Why would I ever choose them?


I fly around Europe all the time and EasyJet has not proven much cheaper for me at all. Depends on time, route etc. I found J seats on a few flights on the legacies at a reasonable price so happily accepting the euro J people like to talk crap about. If the price is right, a blocked middle seat, meal, drinks and the extra luggage makes perfect sense for my needs. On a 1 hour flight? Not worth it, though I got an upgrade on LHR-AMS on BA once for about $40 and I ate and drank my money’s worth in the lounge.

Absolutely nonsensical to say nobody wants a sandwich in eco like some people have. You cannot speak for everyone. Seen it hundreds of times being well appreciated along with the free drink (incl beer & wine). LHG has had a tough first half (how is Ryanair doing?) this year but they will
Bounce back. Armchair CEOs here always know best :-)


You are saying that while many Legacy airlines around Europe lose tons of money, and the fact that Ryanair and Easyjet are the 2nd and 5th largest airlines in Europe. Just step back and think about it for a minute there.

Ask any sane person out there. Would they pay 30-50 euro extra to get extra cold sandwich and drink on a 2 hour flight. Or they rather fly on LCC?
Don't forget to tell them that the legroom are the same.


If it’s the same city pairs, similar schedule in the day and indeed the same legroom (this is definitely not always the case) then most won’t spend the extra <50 indeed. Unless loyalty and/or benefits becomes a factor, so having lounge or luggage included.
Fact is though on most, but certainly not all, routes LCCs don’t have the frequency or convenient schedules. That alone can be worth 30-50 to me and I imagine many others.

If you the option is Vueling vs any legacy however even if schedule etc is even I will personally always pay 50 more to avoid them. Never had a good experience and always find them to have the leash space I’ve experienced.

Either way lots of factors going into the buying decisions and lots of factors behind someone’s willingness to pay.
 
SCQ83
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 7:09 am

fraT wrote:
Just read the news that Ryanair is discontinuing the CGN-SXF route with the start of the winter flight plan. This is the last intra German route for them and they are competing with EW and U2 (which are flying to TXL).
This O&D is the biggest German one in terms of pax since there is a huge amount of Government travel.


I flew that route with FR a few times with rock-bottom prices. It used to be 3-4 daily and now I see it is only flown during weekdays 1-2 daily.

Last year I also flew Eurowings CGN-TXL. I recall seeing Köln Airport with adds everywhere for "18 täglich von Köln nach Berlin". I paid about 30 or 40 euros with a few days in advance and my flight was maybe at 20-30% load factor (entire rows empty).

That seems like a niche Eurowings wanted to defend at any price (domestic German). Not any different than Vueling flying domestic out of BCN. They kicked out Norwegian from BCN-BIO. But internationally, that is another story.
 
AirwayBill
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 8:11 am

"The bad fuel costs" and "the evil low cost airlines".

Sounds like the usual conservative airline rant to somehow excuse their own poor management and idleness.

As said before, the Lufthansa Group is a mess with awkward brandings and ambiguous product offerings, mixed with high operating/labor costs. They are no longer truly competitive on the short-haul European market, often proposing the highest price tags for an average product at best. Time for Sleeping Beauty LH to get their acts together, and clearly upgrade their product or start to look for partnerships with LCCs. The unions will probably cry, let them. The market is moving forward and 5-star LH (*cough cough*) cannot afford to become a decaying brand.-
 
Delta777Jet
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 12:07 pm

SCQ83 wrote:

I flew that route with FR a few times with rock-bottom prices. It used to be 3-4 daily and now I see it is only flown during weekdays 1-2 daily.


So Ryanair made a business decision stopping this route. For them profitability is most important. Domestic flights anyway got an disadvantage, because of the 19 % VAT already included in the prices.
Now probably we see Eurowings cutting frequency on the same route.
I still miss Trans World Airlines and the L-1011
 
MartijnNL
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 12:22 pm

ethernal wrote:
Their intra-EU product is absolute garbage. It is a LCC product.

For you maybe. I made seven Lufthansa flights within Europe this year and they were all perfectly fine.

ethernal wrote:
The reality is that I am going to take the nonstop once a day easyJet flight than try to take the (more expensive) connect-in-FRA/MUC (...)

That's you. But what happens when the nonstop once a day flight gets severely delayed or cancelled? You will probably have to spend the night at the airport.

etheral wrote:
(...) and have to deal with not just one but TWO legs of miserable LCC product (because that is what intra-EU LH is - it is a LCC product and don't try to pretend it is not).

As an aviation enthusiast I usually prefer two flights over one flight. An extra take off and landing during a journey is always nice.

Have you ever connected at Munich? The shorter the connection, the more pleasant it is. The last time I even had a private driver taking me from one aircraft to the other. This was on an economy ticket.
 
fraT
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 12:47 pm

Delta777Jet wrote:
SCQ83 wrote:

I flew that route with FR a few times with rock-bottom prices. It used to be 3-4 daily and now I see it is only flown during weekdays 1-2 daily.


So Ryanair made a business decision stopping this route. For them profitability is most important. Domestic flights anyway got an disadvantage, because of the 19 % VAT already included in the prices.
Now probably we see Eurowings cutting frequency on the same route.


Probably not since the main competitor is U2.
 
ethernal
Posts: 383
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 1:02 pm

MartijnNL wrote:
ethernal wrote:
Their intra-EU product is absolute garbage. It is a LCC product.

For you maybe. I made seven Lufthansa flights within Europe this year and they were all perfectly fine.


Sure, they are perfectly fine. Just like easyJet is perfectly fine. They're all survivable.

ethernal wrote:
The reality is that I am going to take the nonstop once a day easyJet flight than try to take the (more expensive) connect-in-FRA/MUC (...)

That's you. But what happens when the nonstop once a day flight gets severely delayed or cancelled? You will probably have to spend the night at the airport.


In the event of a nonstop where Lufthansa has multiple daily frequencies I may be made slightly better off flying Lufthansa, but if my alternative is a connection versus a nonstop, I am statistically more likely to make it to my destination within 4 hours of plan by taking a nonstop. Taking a connection significantly increases the risk of long duration delays.

ethernal wrote:
(...) and have to deal with not just one but TWO legs of miserable LCC product (because that is what intra-EU LH is - it is a LCC product and don't try to pretend it is not).

As an aviation enthusiast I usually prefer two flights over one flight. An extra take off and landing during a journey is always nice.

Have you ever connected at Munich? The shorter the connection, the more pleasant it is. The last time I even had a private driver taking me from one aircraft to the other. This was on an economy ticket.


I flew over 300,000 butt-in-seat-miles last year across over 150 segments. Taking an extra segment is not something I - nor the vast majority of people - prefer, and this is evidenced by the premiums travelers of all types pay for nonstop versus connecting service. You are an extreme outlier here and you cannot extrapolate your experience to nearly a billion European travelers who, in aggregate, have markedly different preferences from you.
 
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dangerhere
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 2:54 pm

ethernal I think you are looking at things in very black and white terms. In relative terms, not many people fly legacies intra Europe point to point. Just the same as how many people flying LCCs often aren't flying on somewhere else. If you think LH economy sucks, well try fly with Aer Lingus or BA these days. Easyjet does have a decent pitch but the seat width is shockingly bad. Priority boarding last month with easyjet (we didn't buy it ourselves) consisted of having priority to wait 40 minutes down the end of the jetway where there was no a/c, unlike the other end. I like easyjet's onboard style but God help you should a flight be cancelled or diverted. Good luck getting stuck in somewhere like Bydgoszcz at 2am and the next flight is 3 days away.

Where we live in North Eastern Germany, if we want to fly many places, we have two choices essentially, direct LCC flight or KLM/Lufthansa change. I find easyjet to be fairly pricey for what it is, and FR I only use going back to Dublin by default only because I despise AL more. If I get a decent fare, I happily fly via AMS, FRA or MUC and enjoy the free drinks. I'd rather pay a bit more and get a bit more. After all, it's about the journey rather than just going from A to B, probably why I enjoy trains so much on the continent.
 
SCQ83
Posts: 5828
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 4:46 pm

fraT wrote:
Delta777Jet wrote:
So Ryanair made a business decision stopping this route. For them profitability is most important. Domestic flights anyway got an disadvantage, because of the 19 % VAT already included in the prices.
Now probably we see Eurowings cutting frequency on the same route.


Probably not since the main competitor is U2.



Also DBahn. Shortest Köln HBF-Berlin HBF service is 4:17h. Not overly competitive in time but short enough to take some people out of the skies.
 
Blerg
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 4:52 pm

SCQ83 wrote:
fraT wrote:
Delta777Jet wrote:
So Ryanair made a business decision stopping this route. For them profitability is most important. Domestic flights anyway got an disadvantage, because of the 19 % VAT already included in the prices.
Now probably we see Eurowings cutting frequency on the same route.


Probably not since the main competitor is U2.



Also DBahn. Shortest Köln HBF-Berlin HBF service is 4:17h. Not overly competitive in time but short enough to take some people out of the skies.


Is it competitive though? I don't know about CGN but TXL is centrally located and it's quite small. I regularly arrive a bit more than an hour before take off and it's always ok. TXL-CGN is a maximum an hour so that's roughly twice as short as taking the train. Higher yielding passengers travelling between the two cities would most likely end up flying. I still think flying is the more convenient option here.
 
steman
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 5:08 pm

So what is LH´s real issue here? They had to compete against LCC for many years. This is nothing new. And fuel prices used to be much higher than they are now. Can there be wrong managerial decision when it comes to Eurowings and its disorderly growth? Are they paying the price of their own mistakes? Because I can´t really see a big difference in market conditions compared to the past couple of years.
 
SCQ83
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 5:27 pm

steman wrote:
Because I can´t really see a big difference in market conditions compared to the past couple of years.


Ryanair expanding like there is no tomorrow in Germany (Berlin, Hamburg, Köln, Frankfurt). easyJet expanding in Berlin. And Lauda and Wizz in Vienna. Obviously that has a bigger impact in Eurowings.
 
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usdcaguy
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 6:03 pm

You really have to wonder why LHG cannot make up for their losses in domestic markets with their broad international network. Still, I find it amazing that they've done as well as they have offering long-haul flights to the same destinations out of FRA/ZRH/VIE. At some point, you'd think they would consolidate some markets so that everything was sent over one hub instead of three. OS would seem the most likely to get its flights cut in that case, followed by LH at MUC. So much duplication in their system, it's hard to know where to begin.
 
x1234
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 6:10 pm

The problem with LH is that they need more A350's to increase their fuel efficiency. As Germany is a ruler of efficiency I'm surprised they're still operating SO MANY 4-engine planes except for the B748 or A380.
 
787X30
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 6:38 pm

The A346 were the most efficient path when acquired, while it's not too efficient to buy yet another most efficient option every other day...
 
MartijnNL
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Fri Aug 02, 2019 10:24 pm

ethernal wrote:
I flew over 300,000 butt-in-seat-miles last year across over 150 segments. Taking an extra segment is not something I - nor the vast majority of people - prefer, and this is evidenced by the premiums travelers of all types pay for nonstop versus connecting service.

More than 300,000 miles in one year is an incredible amount of travelling. That's thirty times from Europe to the U.S. west coast and back. I can imagine you might even spend more time in the air than some pilots.

With this almost unhealthy travel schedule I understand you prefer to fly nonstop. I think I would too. However I am still not sure the vast majority of travellers choose the nonstop option. They might prefer it, but certainly don't always buy it. Recently when I travelled with KLM from Washington to Amsterdam only 10 percent of the passengers ended their journey at Schiphol. The other whopping 90 percent connected to the European network of KLM and its partners. Probably only the majority of frequent flyers pay extra for the nonstop.

ethernal wrote:
You are an extreme outlier here and you cannot extrapolate your experience to nearly a billion European travelers who, in aggregate, have markedly different preferences from you.

That's probably true. I usually prefer two flights over one. I expect 'members' of an aviation enthusiast website to have the same deviation. But when you travel much more than the average flyer does, I understand the aversion to changing planes.

I ended last year with 37,277 miles and 42 flights. So far this year I have logged 29,609 miles and 32 flights. According to my family, friends and colleagues nobody travels as much as I do. When I tell them many others are flying ten times as much, they find that hard to believe. Hopefully one day I will travel 50,000 miles in one year. That target will be very hard to accomplish, let alone 100,000 miles. But I can always dream about it.
 
LH982
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Sat Aug 03, 2019 6:01 am

MartijnNL wrote:

With this almost unhealthy travel schedule I understand you prefer to fly nonstop. I think I would too. However I am still not sure the vast majority of travellers choose the nonstop option. They might prefer it, but certainly don't always buy it. Recently when I travelled with KLM from Washington to Amsterdam only 10 percent of the passengers ended their journey at Schiphol. The other whopping 90 percent connected to the European network of KLM and its partners. Probably only the majority of frequent flyers pay extra for the nonstop.



I would expect that the majority of those travellers had no nonstop choice. If you're going to Florence or Inverness, you just get to choose which hub you transfer through.

Just about anyone travelling for business in Europe just wants to get home. If there's a direct flight at the right time, that's the one they will want to take. No one wants to be sitting in FRA on a Friday night waiting for a delayed flight and hoping it's not going to miss the curfew and be cancelled.
 
mutu
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Sat Aug 03, 2019 10:13 am

IAG first half results show a stark contrast to these LHG results. I have no doubt LH will adapt a model to compete as necessary as BA have. (Like it or not) . The point is it can be done but the shorthaul product has to adapt and be maintained to provide a proportion of the critical feed to longhaul network. Yes it is 2 worlds when you fly say lHR/FRA/SIN. But so be it.
Average stage lengths intra EU are short in any event.
 
mxaxai
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Sat Aug 03, 2019 10:45 am

Blerg wrote:
SCQ83 wrote:
fraT wrote:

Probably not since the main competitor is U2.



Also DBahn. Shortest Köln HBF-Berlin HBF service is 4:17h. Not overly competitive in time but short enough to take some people out of the skies.


Is it competitive though? I don't know about CGN but TXL is centrally located and it's quite small. I regularly arrive a bit more than an hour before take off and it's always ok. TXL-CGN is a maximum an hour so that's roughly twice as short as taking the train. Higher yielding passengers travelling between the two cities would most likely end up flying. I still think flying is the more convenient option here.

4 hours seem to be the tipping point for many travellers. A new HSR track was opened between Munich and Berlin last year, pushing the time to just under 4 hours. While 48% of travellers had used the plane before, this dropped to 30% today. Train marketshare rose from 23% to 46%.

Note that TXL-CGN is not necessarily a high-yielding route. There is some government traffic but CGN is very much a secondary / LCC airport.
 
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aerorobnz
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Sat Aug 03, 2019 11:14 am

They are also based in a region that is increasingly hostile towards their very existence as an airline. I'm not sure about their long term strategy, but I'm sure this will become more and more of an issue for any EU airlines that are struggling.
Flown to 147 Airports in 62 Countries on 83 Operators and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
SteelChair
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Re: Lufthansa Group posts 1H loss on LCC competition, fuel costs

Sat Aug 03, 2019 1:55 pm

aerorobnz wrote:
They are also based in a region that is increasingly hostile towards their very existence as an airline. I'm not sure about their long term strategy, but I'm sure this will become more and more of an issue for any EU airlines that are struggling.


I tend to agree with this. Just last week one of the other CEOs in Eurooe was actively discouraging air travel.

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