Plans to restart LH destinations? [and other new routes speculations]
 

Could we see LH restart service to destinations such as:

Phoenix PHX?
Portland PDX?
Calgary YYC?
Glasgow GLA?
Bratislava BTS?
Hyderabad HYD?

Where would you like to see LH resume services to?

"Like"? A number of them, like Lima, La Paz, San Juan, Nairobi, Mauritius, Sydney, Jakarta, Manila, Lugano, Inverness. Does it make commercial/financial sense for LH to do so? Less sure.

I would rather appreciate the second daily MEX flight from MUC. Anybody know if and when it is coming?

Out of your list YYC and GLA will probably see a resumption in services. PHX & PDX are definite history, HYD was gifted to EK. BTS was a reactionary move like the service to STN.

And is missed very much...

I don't see LH re-start or opening up any destinations for the next one to two years.

Hmmm... with the massive addition of aircraft capcaities (10 A380, 3 A330, the new 748s have more seats than the retiring 744s) in the past months and economic & competitive ups and downs I won't say that they will not make route adjustments?

The interim reports deliver some facts
 

I am also curious when Lufthansa has inauguration flights to new countries and destinations. :)

Although I have no inside knowledge a closer look on the interim reports and the up-to-date IR communication materials can always be helpful:

http://investor-relations.lufthansa....B-2012-2-d.pdf

Here Lufthansa states the seat load factors as well as the average revenue per Mile:

Copy & Paste from page 11 delivers:

Seat load factor:
Europe 70,3 % (+0,8 % from previous period (Jan-Jun))
America 84,0 % (+2,0 % from previous period)
Asia/Pacific 80,3 % (+0,9 %)
Nahost/Afrika 71,8 % (+0,9%)

So in terms of utilization of the seats offered the areas America and Asia/Pacific will win the race. Although the average revenue per pax mile will differ between different Asian countries I *guess*that we will see some capacity increase to/from China, although the negotiations won´t be easy. :eek:

Due to high competitive pressure from LCC I don´t see much expansion/new destinations within Europe.

Think this interim reports are always fascinating. So just have a look and try your own guess.

The annual report also has the split by regions and the IR comments hint at where they make their money. Americas/TATL seems to be the bulk of the business, China brings profits, NME & India fills the back of the bus across the atlantic.

They already took a deep look at the China and India operations, SE Asia will be next. EK & co don't really have a geographic advantage in the N.Asia - Europe business, so LH and other European legacy carriers should be able to keep that business somewhat profitable.

Europe will see new or reactivated routes, even though LCC pressure is severe. The recent RTM was a prime example :)

So what happened then with Guangzhou???

The other advantage that LH should recall about EK & Co. is that people get tied into their frequent flyer program just like they do with LH (and as such will take them also to Japan for example- which by the way is the slowest growing economy in all of Asia and also one of the most protectionist).

4 flights a day to Bangkok and not one to Guangzhou??

Good question, it definitely failed the bean counters excel test. :p BKK is also about to go, especially when TG starts deploying the Lady Bee to FRA.

At the rate they're going- I probably won't even be SEN after 2016 :)

What will be the qualification for HON:
1) Must take our direct flight FRA-JFK
2) Must be on A380
3) F or J full fare only
......

The problem with the bean counters excel test often is they fail to consider that the fixed costs do not have anywhere else to be allocated to. A famous case of a company that kept cutting business lines as they were not profitable and customers as they were not profitable- only each time to learn that the remaining customers and the remaining business units were each time not profitable with the attached incremental expense allocation increases.

But then again, an airline would never think that way- would they now?

I'm sure LH will deploy their aircraft where they think it will be the most profitable. And I think they have been doing a decent job in that regard.

I assume LH is going to strenghten their Middle and South American basis in the coming 2-3 years. From what I heard, they make good money on their current Latam routes (GRU, EZE, BOG), so why not add 1 or 2 if the aircraft utilisation permits it.

With BTS being 30-45 minutes from VIE, that is extremely unlikely, though I would love to see it myself!

With the new terminal in VIE, it would be much nicer to get directly to BTS from MUC as we used to :)

I completely agree @:-) A customer gone to EK or QR is a customer lost forever

Amen to that. Also, nothing beats 7 minutes door-to-door car ride on the way to the airport (from the city centre). Not mentioning the new terminal in BTS ;)

Even CCU has been gifted to EK / Qatar.. Both are flying this route with very high loads from what I hear..

"...We are Europe’s Airline Powerhouse connecting Europe
with the world and the world via Europe with our global services..."

--LH Annual Report 2011, 15. Mar 2012 (p.37)

Very well said.

It would not be the first time that well-meaning managers have strategically cut "low margin" of "unprofitable" products from their offerings, only to learn the hard way that they have actually cut their own throats...

+1 ^

I really disagree here. LH management does not get a lot of credit from me these days, but I don't think they are complete idiots. If they make decision to cut service on certain routes, then because these are unprofitable and capacity can be used more profitable somewhere else.

This would only apply if LH decides to leave the aircraft parked instead of reutilizing freed capacity somewhere else. And I don't think that reflects reality ;)

OK has been cutting routes for quite some time now, not leaving aircraft parked, thinking it can make more money elsewhere, and yet they are far from being profitable today ;)

I never said anyone was an idiot and the management I have met from Lufthansa are both very intelligent and very capable.

I am suggesting however that strategic and operational decisions are being confused.

To cut a city like Guangzhou is not a strategic decision. The reason LH was not making money in Guangzhou is because their business class product is not competitive at all. Full stop.

Or to CX.

I flew last week on CX because the completely reasonable business class fare to HKG was more than DOUBLE the CX price on LH and CX was non-stop vs. a connection in FRA with LH. I won't write a report comparing CX business to LH.... and at half the price and non-stop... well.. Ciao....

Well said Travelsig,
and that's also the case of EK, QR, EY on most (well most...) LH remaining destinations in Asia.

For Asia- Yes.

For USA as an example- the new Delta business class product is nicer than LH and they have a nonstop to New York and Atlanta daily with perfect timings. Ciao again...

YYC wont happen. It's an AC route now.

If one examines published data from LH, or when one observes load factors anecdotally, it is hard to argue that LH is capacity constrained.

The essential question is whether one gets more money from customers by flying to/from, for example, Guangzhou than one spends in flying those customers to/from Guangzhou. If yes, then for many several reasons, it makes sense to continue to fly to Guangzhou.

Whether or not the route is earning some kind of acceptable "margin" is not particularly relevant in light of stated strategic objectives of "connecting the world" and the goal of actually earning money.

Flights to Guangzhou are almost certainly not cannibalizing revenue on other routes, and if these flights produce positive cash flow, then it is probably not a good idea to abandon them because they are "less profitable" than other routes.

If capacity is not constrained, the "more profitable capacity" argument is not relevant. If flights to Guangzhou are actually cash flow negative (which is possible, but I doubt), then yes, kill them. Otherwise, the service broadens the customer base and meets the objectives of "making money" AND "connecting the world."

Yes, the new LH changes have given me the opportunity to (re)discover some of the competitive offerings of DL from FRA to New York--at the expense of LH. Were it not for the latest round of enhancements to the LH pricing, terms, and conditions, I would not have taken the time to try the DL product and discover that it is not so bad...

DL has, in general, very bad conditions if one needs to change travel dates after booking. However, the recent changes to the LH fare structure has essentially leveled the playing field, where before LH had a definite advantage...

I am sorry but this is a very narrow minded perspective on this matter. And what do you mean by far from being profitable? You do realize that last year LH posted an operating profit of over 800 Million Euros and had a small net loss of about 13 million euros due costs incurred from the sale of BMI? Profitability does not automatically happen within a short period when one single decision is made, especially in such an economic climate and I am sure you are aware of this. Also, an operating loss at the second quarter of a financial year does not predict that the company would not post a profit and this has been witnessed several times (LH's 2010 results for example). LH even fared better than it had forecasted for Q2 earnings and I am very positive that happened as a result of some of the “controversial” measures that have taken.

What solid facts/evidence do you have to suggest this as the absolute reason why LH cut CAN? I am really interested in the facts you have based this comment on. If this is the case, why does LH still fly to HKG despite having strong competition from EK, QR, BA and CX? Why did AY stop CAN despite having a very good J product that outclasses LH’s? Granted, Guangzhou has an economy that is growing but that does not mean majority of its flying population can afford to fly J class. Why does AF send 772s/A343s with small premium cabins to CAN? Does that not imply that the route is not heavy on premium traffic? At this point, it would not be very smart of LH to continue to fly to a destination that does not provide enough yields and this has most likely been caused by low premium demand and rising fuel prices. Yes, the competition would have had an impact in the decision but it certainly does not narrow down to an inferior J product. It is already a known fact that CAN is a de-facto SkyTeam hub. CZ has a huge presence there and hence AF continues to serve the route due to the connectivity CZ offers them. Why isn’t BA eyeing CAN for services in the near future and why is AF the only European airline flying there? At the end of the day it is in fact a strategic decision and has very little to do with its J class not being up to the competition. If that was the case, LH would not be flying to three quarters of its intercontinental destinations by now.

No "solid facts" on why LH cut CAN. Here are a few points of my thinking:

One of the fastest growing commercial aviation airports in the world.

One of the most affluent cities in PRC.

Host to the majority of the Fortune 500 (>50%).

Hosts several of Asias largest trade fairs.

Increasing lift by several carriers.

As to why does HKG work? I suppose because it has been an international banking and trading hub for more than a century and an air hub for more than 50 years.

By the way- friendly comments and questions are always welcome :)

Have a great day,

Travelsig

I am sure you are aware of the fact that OK means Czech Airlines. And by far from profitable I meant this. I am fully aware of the subtle differences between LH and OK, and my comment was only meant to provide an example of mismanaged route cuts and fleet reductions, as an answer to an earlier post in the thread suggesting that those measure will for sure fix things for LH.

Lufthansa New Routes
 

Do you think Lufthansa could add San Jose CA as a new city and add flights to Berlin, Dusseldorf, Frankfurt, Munich? With JFK and EWR having LH flights I don't see why SJC couldn't support another LH destination. It would have to be on their Airbus 340 or possibly 747-800 aircraft.

If they could have a 4:00 PM departure time to Frankfurt a 5:00 PM flight to Berlin a 7:00 PM to Dusseldorf and a 8:30 PM flight to Munich that would really bring the "Non Stop You" home.

Here you go:
http://www.lufthansa-private-jet.com/

Lufthansa New Routes
 

Really not seeing that happening...
SFO is already very well served with LH an LX flights plus codeshare on UA
Berlin nonstop to CA - absolutely not! Don't think that could be profitable.....

You have to think out of the box and think bigger, a more appropriate question would be: "Would Lufthansa ever abandon SFO for SJC?" Number 14 most populous US city for the Number 10. *A partner UAL can serve it's customers at its SFO hub, Lufthansa could be the big fish in the smaller airport and put its customers closer to the Valley.

Is this a serious question? Because New York (the world's largest airport system) can support flights to Lufthansa's hub and one to Dusseldorf a secondary destination should put on flights to hub and non-hub cities?

Why not have nonstop flights from Cologne to Quito, after all there is this flower shop in downtown Cologne that sells tulips from Ecuador?

:D:D:D