GBM.flights

Longhaul Wings from CGN?
Per ch-aviation

CGN with no night-time curfew would be interesting for flights departing after midnight to Asia minimizing the ground time of the aircraft before the return leg

NA-Flyer

I find it very strange that LH wants to wrestle back the ME3 with a low cost subsidiary instead of their mainline fleet

Aren't they suppose to compete with the ME3 apple to apple?

TRAVELSIG

I find the entire situation somewhat confusing.

I thought it was the business class customer that was defecting over to ME3?

In any case I don't know how it is possible to make money with <500 EUR RT tickets to Asia and a German cost base.

gum

Noone knows how do make money with such fares even if you have a view on the slightly increased seat density.

The lack of edible food is not a real cost saver on long-haul routes, neither the overpriced sale of beverages is.

*View into the crystal ball*

Therefore I assume this low-cost carrier product will have a lifecycle of less than one year and resulting a sudden grounding/stop of operations of this subsidiary.

The remaining and booked passengers then will be rebooked to a proper mainline service.
[/view]

Main problem on long-haul in Economy Class is not capacity utilization but decrease of fares.

That said the creation of a new entity including a large capacity is contradicting the Premium Economy/value approach.

oliver2002

According to various statements by EK, the Y pax flying to SEA and OZ from Europe is what brings in the revenue for them, accounting for 80% of their profits. The F cabin makes a loss, and the business cabin is sold at break even.

I guess LHs take is to make it difficult for the ME3 to fill the large B77W and A380 Y cabins and make life tough. Thats assuming that the ME3 operate with the aim to atleast cover variable cost @:-)

YuropFlyer

EK has been posting very decent profits in most of the recent years (with two years of the last 10 one's being in the red only) despite their massive fleet-build-up. They've not gotten any support of Dubai since the (small) funding credit of $80m 25 years ago. Which was WAY smaller than what Lufthansa got, when they were made a private operated company (they basically got a gigantic fleet for free from the German state in 1994, later acquired the whole Swiss fleet for an absolute bargain, and OS didn't really cost them anything either..)

In contrary, Emirates is now funding the Emirate of Dubai quite substantially.

I guess at least for EK it's safe to assume they've a management which knows exactly what they're doing. I'm not so sure regarding Lufthansa about that

gum

IMHO this is red herring "made" by Emirates.

I would agree that not every route on the Emirates network is able to maintain a true First Class product. Therefore Emirates has also two-class aircrafts and not the low-density, high comfort layout which Lufthansa provides in its First Class environment.

I even wouldn't dare to denominate 14 seats in Zone A of the Upper Deck of the whale as being First Class when Lufty only has 8 seats there.

So I am convinced that Emirates now:

+ makes a huge amount of cash-flow through its Business Class product (as long as it's not 1-2-1 like SQ)
+ is nearly on break even on Y fares. The additional effect for the founders and majority shareholders is to schlep many tourists to Dubai for a short or longer stay. Thus providing a solid revenue stream for the local tourist industry and establishing a real estate market which was unknown/unimaginable 15+ years ago.
+ I wonder whether true First Class customers really accept the marketing of a comparatively squeezed J+ product as First Class "suite". Don't know if they have profits there.


Will come to an end when the next global economic turndown will cast the shadows......

davidcito

I haven't seen this one posted here, sorry if I overlooked it:

Lufthansa has found agreement with UFO to cut costs on A340 and thus keep them in fleet in high-density lay out (18C only, rest Y):

http://www.dailymail.co.uk/wires/reu...s-service.html

David

YuropFlyer

That's like comparing apples and oranges..

First of all, the 14 Suites (!) that EK offers in their A380 are a trully great experience. Just as much as the 8 seats in the LH A380, I would say, but certainly nothing short of it.

I guess you've not flown them yourself, just compare Seatguru:

http://www.seatguru.com/airlines/Emi...irbus_A380.php

http://www.seatguru.com/airlines/Luf...irbus_A380.php

As you can see, Lufthansa squeezes in plenty of other stuff before the exit besides it's 8 seats.

Emirates has it's seats in a layout that you don't directly see the neighbour over the aisle, which is imho offers much better privacy.

All in all, with Emirates offering a true F experience all the way from home to your final accommodation no matter where you fly on their network (okok, a few destinations don't have chauffeur drive), and LH just on their hubs once you arrived at the airport yourself till you get your baggage, but for about twice the pricetag, I'm sure anyone will choose LH.. in the fantasy world of the LH board

Also, keep in mind that LH doesn't have C or F at all for flights up to 5-6 hours or so - they've NEK with a blocked middle seat selling as C, that's about it. (and still PLENTY of their Y+ seats (Rutsche) selling as C on long haul, including almost their whole A380 fleet..)

Couple other stuff which hasn't been mentioned above:

-Showers in F make for SUCH a more refreshed morning.
-Bar in C is great to socialize and spend time with fellow travellers.
-I prefer the food in EK C over what LH offers, but that's personal opinion. I guess that food offers in EK Y are better than in LH Y isn't a personal opinion but accepted common knowledge
-Good chance of having someone speaking my native language with EK - zero chance on LH for that.
-Op-Ups happening according to Status on EK, and not to booking class bought on LH (ie, non member in J beats HON in C).

I guess the only negative point for EK is indeed that you've to change in DXB, which is bad when you're living nearby FRA and MUC, and your final destination is served directly by LH from there.

Which means, for north asian destination like FRA-PEK (where I would chose CA for a direct flight ) they've an advantage over EK. And obviously even for South East asia destinations - if you don't mind the day flights to BKK for example on LH..

With EK you often get more choices - including a short or longer layover in DXB. Personally I don't mind to break my travel there, especially when in Y, and giving you the choice of individual departing/arriving hours, which you can combine to fight your individual jet lag. Not so much choice with LH..

Now, had the unfair lobbying by LH been stopped, and EK allowed to fly to more German airports directly, the situation would be even better. Why fly TXL-FRA-BKK-HKT, when EK would offer TXL-DXB-HKT?

LH is always babbling about "fair competition", and keeping to try to make people believe that EK is getting unfair advantages, while in reality, the contrary is true. In a truly open market, EK would be at even more advantages than LH. I hope EK to operate MUCH more also from their non-DXB hubs, adding more of those in the future. LH obviously is very much afraid of such things going to happen - I for one, as the customer, hope it will happen.

TRAVELSIG

Back on the armchair CEO discussion:

It seems today Helvetica (LX Subsidiary) announced they will be buying 15 new generation A320 and Eurowings 10 for a total investment [at list price] of 2.5 bio EURO.

Helvetica- the darling of LX with their Fokkers and Eurowings (I don't know even what they do now for Swiss and Lufthansa?)- buying 25 new airplanes. Looks like their may be some acceleration on the LCC front for Lufthansa group? Or I have somehow missed this press release?

verve

Last time I've checked Helvetic was an independent Airline doing some Wetlease work for LX....maybe you mixed them up with Edelweiss (WK) which is actually owned by LX

YuropFlyer

Actually, it's Lufthansa buying stuff for LX:

http://www.nzz.ch/wirtschaft/newstic...neo-1.18385568

Seems LX will receive 15 A320neo from 2019 onwards to replace some of it's existing older planes. They've also ordered 10 more A320 (current version) for Eurowings (I guess TRAVELSIG simply mistaken LX with Helvetic, as aside from that, his posting was correct)

oliver2002

The CFO mentioned that some time ago:
Source: http://seekingalpha.com/article/2373...all-transcript
© 2014 Seeking Alpha

gum

That is indeed true.

I also see the weakness of the LH product regarding the short-haul destinations and the prolongation of the A321 NEK to destinations like CAI and TLV.

Additionally the wardrobe has been slashed since the days of the 2-3 product and that said the additional value for Business customers on LH short-haul is lower than before.

So the managament should complete the roadworks there and not adding additional complexity by founding a new low cost subsidiary. As stated before that subfleet will cause many problems for Lufthansa itself and not for their competitors.

Besides the cannibalization effect on the own Y offer it will have a tremendous impact on the image of the group. As stated before I *assume* without having other knowledge that they have to go to 2-5-2 seating on the A330 in order to get (in their own view) competitive. A 2-4-2 A330 won't work in respect of cost savings.

What is if your subfleet goes tech? Paying an enourmous amount of delay compensation or forking out the traditional seating including many op-ups when using a LH mainline plane?


The longhaul wings is large enough to cause serious damage at LH but too small to encounter the competition of the ME3.

cas_de

Update from today's supervisory board meeting:

http://www.lufthansagroup.com/en/pre...icle/3228.html