Topic of the Week: Lufthansa Thinking About Long Haul, Low Cost Carrier

It looks like Lufthansa is batting around the idea of starting up a long haul low cost carrier. *sigh* This has never worked before, but apparently Lufthansa wants to try it again. What do you think? Any chance this works


24 Responses to Topic of the Week: Lufthansa Thinking About Long Haul, Low Cost Carrier

  1. Nick says:

    Jetstar does some long haul and it seems to work….

    • Owen says:

      It is true that you get what you pay for but my experience with JetStar was VILE. There comes a point where you don’t submit yourself to such an airline, no matter what the saving. I wish Lufthansa luck.

  2. BJ says:

    Jetstar lose money on long haul.

    If you can save $10 on a $100 fare for a short flight people will go for it and suffer no service. Over 12 hours the cost of losing no service goes up. So saving $100 on a $1700 fare is not so attractive. Yes the saving is higher but not in relation to what youre prepared to pay for your trip.
    If Air Asia cant make money on long haul then I doubt Lufthansa will do better.

  3. Those who don’t learn from history are doomed to repeat it.

  4. Luke says:

    Scoot and Air AsiaX seem to be popular. Scoot is a Singapore air subsiduary.

    • Didn’t Air Asia X drop all of their European routes? It seems their is a sweet spot in range/fares (at least for the A330) as far as profitability. I would question how many routes from Europe would bare any resemblance to the profitable routes for Air Asia X and Scoot i.e. large urban centers with limited competition.

      Hopefully they will name the start-up PEOPLExpress!

    • Popular isnt profitable! Even cash flow positive isn’t profitable.

      For LH, starting a new carrier takes a big investment, I wonder if they are better off spending on product upgrades, marketing, etc.

  5. I don’t get how LH with Star partners SQ,TG,NH,CA,ZH,OS is having trouble competing to/from Asia.

    It can’t all be the missing link of the surrounding India area causing their problems.

    Sounds like LH wants a low cost carrier to fly to all the smaller secondary cities that the gulf carriers are serving.

  6. Eric says:

    Guess they are experiencing some bedauern over selling off Condor. IMHO a key phrase in the briefing is that a ‘JV focusing on Asia’ is under consideration. Apparently LH is working with STAR partner Turkish in studying the idea. I think they only (long shot) way this can work is to establish an operation outside of the EU for cost control. Singapore’s SCOOT comes to mind…or investing in Air Asia could be options.

  7. Norwegian Air Shuttle is pretty close already. Had plans to start with the 787, but will use some leased A340s until that situation all shakes out. So that’s some competition for Lufthansa. Cranky, I think you’d like Norwegian … especially how they paints the faces of famous Scandinavian and Nordic people on the tails of each plane.

  8. Itan2Much says:

    Why? AirBerlin already flies to the USA and is very reasonable . . . and, with a Business Class option.

  9. low cost long haul, not sure that’s ever actually worked before! certainly hasn’t with current fuel prices. it definitely can’t work in the EU. i guess if competing with the lower cost structures of gulf carriers to secondary and tertiary asian markets is the issue, they will have to feed pxs over FRA to some non-EU partner/JV/code share airlines to destinations they can’t profitably serve on their own metal, right? seems like they could find some partners to achieve that instead of ginning up their own new venture.

  10. CJ Taylor says:

    Isn’t this AirBerlin’s business model for its long haul flights? Currently serving JFK, MCO, LAX, and now ORD? I have shopped AirBerlin for flights to Europe and have used the airline for intraEurope travel. Their Munich and Palma Majorca facilities are impressive. And their new Willie Brandt Berlin will be very dominant. I am sure LH has to take them on.. what about Condor ?

  11. Ed Kelty says:

    They should save the expense and just charge less for unsold crummy seats in the back of the plane. I’m still unwrapping my legs from last week’s Delta coach flight when all other seats on the plane were sold out.

  12. Owen says:

    JetStar is VILE. There is a point that savings don’t justify what JetStar does to one. I wish Lufthansa, Berlin, etc. lots of luck.

  13. dec Ryan says:

    LH doesn’t have the real discpline to do an LCC. Their need LCC partners. Only Tiger & Jetstar have shown how legacies can do it.

    • peteharb says:

      Agreed, mostly. Starting point is – LH have to get a foothold in Asia’s future growth. No choice. Next, how to do? The existing model won’t get them there, even Germanwings. So, yes they need a partner (plus they have to persuade their unions). As long as they let their partner do the heavy lifting, there are plenty of options – try AirAsia, Jetstar, Scoot, maybe Lion, (yep, and Tiger, Dec). Don’t forget this is cowboy country now. Anything can work. Big question – is LH adept enough to implement it? KLM could; could BA? Watch this space

  14. yo says:

    How do you say “Family Airlines” in German?

    Ya ve have das clowns on zee plane!

  15. Jetstar does long haul low cost but there is a lot of speculation around the Australian media that it is loss making and being propped up by Qantas international & Jetstar domestic (and in turn the ‘losses’ that Qantas international are making are being used to justify gutting routes such as Perth/Brisbane/Adelaide – Singapore (and onto London), Sydney-Frankfurt, etc.

    Air Asia X seems to do OK on Australia routes but struggled and ultimately cancelled Europe routes. Scoot is only very new so too early to tell if it’ll be successful but bear in mind Tiger Airways (SQ’s short haul LCC) has struggled so I wouldn’t necessarily say Scoot’s success is a surety.

    Basically the road to long haul LCCs is paved with failures so they’d have to do something very different to make it work.

  16. Old Dad says:

    How about a long haul with enough space between seats to lower your tray and to focus your eyes on reading material. They could drive AA out of the skies!

  17. S. Brown says:

    Seems worth mentioning that Condor used to be just that for Lufthansa — a long haul leisure subsidiary that got sold off to Thomas Cook. Jetstar is one comparable. Another, the jury on which is still out, is Rouge, the low-cost leisure partner of Air Canada that will begin service this summer.

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