The leader of Germany’s largest airline is rallying against ultra-low-cost carriers and their fares, calling them “irresponsible.” In a commentary to a Swiss newspaper, the executive made his thoughts clear: there’s no place in the world for $11 airfare.
Lufthansa Group chairman and chief executive officer Carsten Spohr has a message about low-cost carrier competition in Europe: selling fares for as little as 10 Euros (around $11) hurts the entire aviation industry. According to a Bloomberg report, the airline leader made comments about Ryanair and others during an interview in a Swiss newspaper.
Spohr is quoted as saying the low fares are “economically, ecologically and politically irresponsible,” followed by making a definitive statement: “Flights for less than 10 euros shouldn’t exist.” He also took aim at the profit lines of Europe’s low-cost carriers, accusing them of “losing a massive amount of money.”
Low-cost airlines are a staple of Europe’s aviation market, with companies like Ryanair and EasyJet offering fares for as low as $11, excluding seat selection and luggage allowances. The direct competition for passengers has forced companies like Lufthansa to open no-frills subsidiaries, like Eurowings.
Their growth was predicted in a 2003 study commissioned by the International Civil Aviation Organization, the air wing of the United Nations. Their study predicted by 2013, low-cost carriers would “possess around one-third of the intra-European market.” It went on to predict today’s fare wars by writing: “New price sensitive markets will emerge, such as Germany, Scandinavia and the countries of Eastern Europe.”
The rise of low-cost carriers also came at a price – other European carriers. In 2017 alone, due in part to rapidly decreasing fares, both Air Berlin and Monarch Airlines went bankrupt, leaving thousands of passengers stranded away from home.
Although the ongoing fare war forced Lufthansa to reduce 2019 profit forecasts due to increased competition, the carrier noted they will remain the dominant carrier in Germany. The airline group includes other holdings, including SWISS.
[Featured Image: Ryanair Wizz]