Lufthansa’s new budget airline cleared for take-off

[jsoprano]

From FT: http://www.ft.com/cms/s/0/6d86e350-7b03-11e4-8646-00144feabdc0.html#axzz3KsDCwxqO

The German airline’s supervisory board on Wednesday approved the new “Eurowings” short-haul and long-haul offering through which the company aims to compete better against budget and Middle Eastern carriers.

The Eurowings long-haul service will initially be equipped with three leased 310-seat Airbus A330 aircraft and serve Florida, southern Africa and destinations in the Indian Ocean. The long-haul fleet could be expanded to seven aircraft, management said.

Not sure what to think of it. Main motivator is definitely labour costs and trying to 'break' the influence of unions on the LH main brand. Sounds very similar to QF/JQ. What I don't understand though is why they have to bring back the Eurowings brand and can't just expand under the existing and just recently re-launched Germanwings name? Does not make sense to me...

I still have fond memories of Eurowings before they were bought by LH, when they still had an extensive regional network in Germany and were feeding KL. My only flight out of THF was on a Eurowings AT42 to DTM. Man, I am getting old...

 

[samh004]

What I don't understand though is why they have to bring back the Eurowings brand and can't just expand under the existing and just recently re-launched Germanwings name? Does not make sense to me...

Perhaps the market research suggested Euro sounded better than German?

 

[jsoprano]

Perhaps the market research suggested Euro sounded better than German?

I am both a proud German and European (in the sense of what the EU stands for besides bureaucracy), but I somehow can't agree with that interpretation at all.

But you're probably right. Also, their base of Cologne-Bonn is so easily accessible from BENELUX as well, it makes some sense to drop the German.

 

[jsoprano]

Eurowings have now announced long-haul routes and frequencies:

Eurowings Outlines Planned Operation in W15 | Airline Route

From an Australian perspective, the Cologne-Bangkok route might be interesting for some to catch a cheap ride to Europe (in conjunction with a cheap JQ flight AU-BKK). They will fly from/to DMK though, twice a week. Fares bookable at this stage (I checked late Jan 2016) are ~$290 each way.

 

[Mattg]

I'm seeing return flights from Bangkok to Cologne at ~$582 in the SMART category. Combine this with a cheap Jetstar flight to Bangkok and you have a way to Europe for under $1000! (Unless you want to add baggage, meals etc. but it's still very cheap.)

 

[samh004]

Great for backpackers.

Though I do wonder if it can be profitable over that distance at that price!

 

[juddles]

... Main motivator is definitely labour costs ....

Am sure I read somewhere that Lufthansa has the absolutely highest cost per employee of all carriers. I am amzaed they are still flying fullstop.

Hope 747 lovers like myself prop them up

 

[MEL_Traveller]

Am sure I read somewhere that Lufthansa has the absolutely highest cost per employee of all carriers. I am amzaed they are still flying fullstop.

Hope 747 lovers like myself prop them up

Surely not!! Only Qantas is burdened with high costs and an unlevel playing field and competition and... well... the list goes on...

Interesting if LH does have one of the highest employee costs... in 2014 they made a three-quarter year operating profit of EUR 849 million: Lufthansa confirms projected 2014 operating result: EUR 1 billion profit in spite of strikes - News & Releases - Lufthansa Group

But then they don't have any competition from Middle East carriers with lower staff costs. And they don't have to content with EU compensation laws.

Oh wait...

 

[Mattg]

Surely not!! Only Qantas is burdened with high costs and an unlevel playing field and competition and... well... the list goes on...

Interesting if LH does have one of the highest employee costs... in 2014 they made a three-quarter year operating profit of EUR 849 million: Lufthansa confirms projected 2014 operating result: EUR 1 billion profit in spite of strikes - News & Releases - Lufthansa Group

But then they don't have any competition from Middle East carriers with lower staff costs. And they don't have to content with EU compensation laws.

Oh wait...

Lufthansa's fare prices are also very high, especially intra-Europe yet they still manage to fill their planes (in my experience with the major German domestic routes, anyway). Long-haul, fares are sometimes more competitive but they still seem to be making big bucks.
Also keep in mind that Germanwings, which for all intents and purposes is like Jetstar, is part of the Lufthansa Group.

 

[RAM]

Great for backpackers.

Though I do wonder if it can be profitable over that distance at that price!

As they are launch fares then they may well be break-even.

HOWEVER, as a new set-up they may have locked in the avgs price at the recent lows, and unlike Q, are using it to give potential passengers a great deal and still make some money. If you could set up a travelator from Germany to Bangkok it would be full the entire distance from Germany to Bangkok - the Germans love going there.

Flying from a cheaper airport (Cologne) also makes it a more profitable (potential) route.

BTW - remember JQ and its $199 fares to Tokyo?

 

[QPProletarian]

Tickets ex europe to Australia can be had even on QF for <12-1300 . Cathay was recently around the $900. Why fly LCC, unless as One-Way to position.

 

[RAM]

Tickets ex europe to Australia can be had even on QF for <12-1300 . Cathay was recently around the $900. Why fly LCC, unless as One-Way to position.

Currently return UK/Europe on V Aust & Etihad in Dec/Jan Peak is available from $1,800 and $1,700 respectively. Mostly rebadged Etihad on the A380 (life is hard). Seats are disappearing fast though. I wonder how much an upgrade to a 1st suite will cost at the airport on Boxing Day? (late Xmas present....).

 

[clifford]

Tickets ex europe to Australia can be had even on QF for <12-1300 . Cathay was recently around the $900. Why fly LCC, unless as One-Way to position.

Don't forget the Pacific Peso is plummeting (government ordered). So fares ex Europe are rather exy.

 

[RAM]

Don't forget the Pacific Peso is plummeting (government ordered). So fares ex Europe are rather exy.

Well not quite the full story - be wary of listening to the radio or TV experts.

The USD is very strong, the AUD is currently quite strong and the Euro is weak.
AUD/USD


AUD/EUR


EUR/USD

 

[whatmeworry]

Interesting fee structure depending on payment method.

* For payments other than with VISA Electron, VISA Debit Card or by direct debit, a surcharge (invoice via Ratepay: €9.90; PayPal: €9.90 / £9 / CHF 13 / $14 / CZK 277 / SEK 99 / NOK 81 / PLN 46 / HUF 3,267; credit card: 2% of the total fare, see booking step 5) applies.

 

[jsoprano]

Quick update: according to airlineroute.net, EW will change Bangkok operations to BKK instead of DMK. Commences 20 Dec, twice weekly. Should make it easier for anyone from Down Under to connect to these flights.

 

[Mattg]

Quick update: according to airlineroute.net, EW will change Bangkok operations to BKK instead of DMK. Commences 20 Dec, twice weekly. Should make it easier for anyone from Down Under to connect to these flights.

Indeed, I got an email about this change a couple of weeks ago as it affects my bookings. No change to flight times.

 

[joyvee]

I would rather fly Royal Brunei . They had fares under $1000 Melbourne to LHR. Seats, food and service better than JQ. Worth comparing their price level if MEL is accessible. Their flights to BKK are often under $700 outside peak holiday times.