gum

I can only speak about Condor from a German point of view. The history of Condor ranges back to the last century where it was something like the holiday carrier of Lufthansa. Low Cost airlines have been unknown at that time. But Lufthansa wanted to get a fair share of the private travel between Germany and especially some islands in Spain.

At that time Condor was something like a slightly downgraded Lufthansa experience. Baggage fees were also unknown like the highly volatile fares. Many seats were sold to wholesalers like the large tour operators. The sale of individual seats to travellers was for a long time nearly unknown. Now Condor has on many routes a slightly modified one-class system with the classic Economy Class and a Premium Economy class.

Condor often operates from the main airports and hubs and never tried to sell the airport of Hahn as Frankfurt-Hahn or Memmingen as Munich-West.

These are IMHO the main differences between the LCC and the Condor approach. So a more traditional development than reshaping the industry by a boldfaced airline with flashy pointed aircrafts.

sunseeker

another good/bad example of LH exercising activism (as opposed to activity);
this idea lacks any recognition of reality and is doomed from the start...

IAN-UK

Condor was essentially set up as a charter carrier. Charter airlines are in reality a subset of low-cost carriers: the major difference being that these days they generally form part of vertically integrated tour operators, or operate very closely with a number of tour operators. They operate to destinations selected by their partners and their capacity is largely taken up by these, and a defining difference has always been that though they might offer seat-only deals, these are marketed through tour operators rather than the airline itself.

Some operators became "hybrids" in offering seats directly to the public. Monarch was one of those.

Long haul charter carriers and some hybrid airlines offer seats directly to the public or through tour operators. But for these airlines the seat-only sale will be icing on the cake: they have the security of providing most of their capacity to their partner holiday companies.

Pure long-haul LCC is a difficult concept. There have been many failures and very little in the way of success: Norwegian may have deep enough pockets to sustain operations for the busy season, but .....

Some of the major costs that short-haul operators can control go out of the window in long-haul operations. Lack of feed at both ends of a route have been major stumbling blocks. Here, at least, Lufthansa might have an advantage - but the problems of limited scope for cost reduction, and the cannibilsation of existing economy class demand suggest a very short, very expensive, foray into the low-cost world.

Dr. HFH

Or, looked at slightly differently, a CEO who would love to discourage a potential future competitor from entering the market.

TRAVELSIG

AirAsia worried about Lufthansa?

AirAsia has brought low cost to such a level even Ryanair is in awe.

Test them out some time- I did once when they were the only flight available at all- 29 SGD all in SIN to KUL. Amazing level of cost efficiency as an operator. I don't think in their wildest ambitions could yet another new Lufthansa subsidiary come close to competing to AirAsia on cost nor on hubs in particularly population dense areas.

The AirAsia strategy and message by the way are both very very clear "Now, everybody can fly" which is projected on billboards in low income and high traffic neighborhoods all over SE Asia. I don't see them starting a HON nor SEN program anytime soon and their management team is very very very lean.

AirAsia also opens up routes where no one else can nor does which is remarkably different from a management team whose idea of risk is adding a second daily flight to Newark.

Here is a little about their new Indian venture here:

The air carrier is pursuing a strategy developed on competitive fares and a dream of making air travel affordable to the masses. On how is it possible, he said the whole idea is to allow the common man to fly and “don’t charge them for things [services] that they do not want. Unbundling of fares is right, our competition should not complain,” he pointed out.



http://www.thehindu.com/business/Ind...cle6173434.ece

While I may debate the soundness of the AirAsia strategy- at least they have one which is more than I can say of a "me too" policy implemented years behind.

ashkale

I am not sure how much you know about AirAsia but I would say it is one PONZI Air pyramid scheme waiting to fall. They fly you on someone elses money paid for tomorrows ticket. Agressive accounting policies permitted in Malaysia mean they can get away with accounting future revenues today (upto 2 years in advance).

It wasnt that long ago that Bernie Madoff used to be considered a great investor!

geminidreams

The Qantas model with Jetstar has been very painful. Qantas has been gutted and Jetstar is ho hum ordinary.

TRAVELSIG

Yes, and remember Ted, Song, Go!, Continental Lite, Jetsgo, LaudaAir, Sabena "we'll make it up in volume", TUI, SAS Snowflake, Malev Express, BasikAir, - actually if you want to see how very difficult it is visit the wikipedia page of "list of defunct airlines" and see just how many of them were low cost.

Perhaps management would better spend their time looking at all the "higher spend/difficult to generate business" customers they previously had and lost through a mix of commercial decisions and inability to offer a competitive product within the timeframe while holding on to a dubious concept that the competitive advantage is "our hubs in FRA AND MUC" which customers supposedly will pay thousands of euros extra to fly through to receive at times an inferior business class product and heaven help them if they need to change their tickets. All the while bashing the GCC and watching their customers go to them.

How much alone would the experts of this thread wager that was lost in net income (or gross if that is easier) due to the five years of consecutive enhancements to the Miles&More program? Meaning that customers chose to fly on other carriers after getting fed up with the continual depreciation of benefits and mileage combined with a general "you will fly with us anyway" attitude which Lufthansa has clearly been demonstrating and in fact even clearly vocalizing to the business class flyer that does not pay full C or J fares.

How many times does a customer pay sky high change fees for a supposedly flexible ticket before they simply start flying with someone else?

Here is a fun read on the "failed business model" of low cost airlines- if nothing else the quotes are somewhat colourful:

http://www.garsonline.de/Downloads/0..._GARS_2009.pdf

Crampedin13A

The Michael O'Leary quote on "Granny fell ill" is hilarious

IAN-UK

I think even in the wildest dreams of Lufthansa's consultant advisers, competing with Air Asia isn't on the cards.

gum

^

YuropFlyer

Apparently, they think they can do BETTER than Air Asia..

Air Asia (X) gave up their London and Paris routes a while ago, when they couldn't make them profitable - despite even offering tickets via their hub in KUL to/from other destinations. If LH is going on a purely point-to-point strategy, they're even losing out that traffic.. with certainly higher base costs than Air Asia, I just can't see this thingy going to work.. they can't use Germanwings as a feeder as they don't fly to MUC/FRA, and unless they operate their Cheapo-Wings operations out of DUS or TXL ( ) they'll have to feed it with "proper" LH operating flights.. I'll give this thing exactly 0% to work the way LH wants. They'll be neither a Charter operation (meaning, high load guaranteed by tour contractors) nor won't they be able to fill their planes at prices high enough.. if people can choose between 450-500€ on legacy carriers (all included) and 300€ (plus food, luggage, etc. etc.) on Cheapo-Wings, most of them will go legacy. This isn't SXF-FCO, where you can skip drinks, food and luggage for your weekend trip.. oh, and 300€ won't even be enough to make profit, and the closer they get to the legacies, the less people will choose them..

But hey, it seems to be kind of tradition at LH to push the cart even deeper into the mud, so why should Spohr change this "strategy"?

oliver2002

Now you are mixing regional with longhaul.

I would say Tower Air was the first longhaul LCC. Air Transat is probably also in that category, although I think they fall more in the Condor category.

What the legacy carriers are doing is observe the Norwegian (DY) 787 longhaul experiment from Europe to Asia and the US and how successful it is (if you ignore the terrible performance of the Dreamburner which is not really the fault of DY).

It seems people are willing to fly point to point with low wage Thai/US crews and 'Norwegian' aircraft registered in Ireland with low end salaried flight crew if the barebones seat is sold for 1500SEK/150GBP/139€ as entry level.

I'm pretty certain XQ can do the same with decent equipment and crews from Turkey/Germany unsing the LH branding to imply safety/reliability.

I really don't know if DY has been able to lure away customers on the BKK sector from the ME3. If they have, then the baseload that pays for the fuel for the ME3 to stay cash positive can be siphoned off. DY has definitely done that in their TATL routes, but they are still too small to make a significant dent in that huge market. I'm sure any western airline annoyed with the ME3 would explore a plan to make their life miserable if it doesn't cost much

starflyergold

Exactly, I dare say even LH cont service can't compete with Air Asia standards. It's a pretty slick operation. With regard to longhaul if Tony can't make them work few, if any, will succeed.

If LH is spooked by the likes of Norwegian and their longhaul service, they shouldn't be. A friend recently flew with them and by the time you add bag, meal, water!! etc you are at legacy carrier prices. Plus of course you always run the risk of travelling on that old Euroatlantic bird Norwegian have on standby because there is no fat in the schedules if anything goes wrong.

oliver2002

They are not spooked, they are intrigued. @:-) On the bread and butter TATL business, they see it like your friend.

But on the ME3 routes...