Lufthansa puts battle plans into place
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The Lufthansa Group has announced a new WINGS low-cost concept as it puts plans in place to become a ‘five star carrier’ by 2020.
The German group hopes to take on the growth of Gulf carrier and European low-cost rivals with the move, which could also see long-haul budget flights launch.
The platform will cover its hubs at Frankfurt, Munich, Zurich, Vienna and Brussels to build on the success of Germanwings, ‘aligned to high-growth market the private air travel’ on point-to-point services.
It will first include the new Eurowings which will launch in spring 2015 with 23 Airbus A320s operating flights from Germany and Basel, as well as Germanwings which will receive an extra 60 aircraft.
Lufthansa is also in talks over a new long-haul platform under WINGS that could include working with a partner. The group revealed it is already in advanced talks with Turkish Airlines, for a launch in winter 2015 with seven Boeing 767 or Airbus A330.
In addition, Lufthansa Passenger Airlines will halve its capacity growth and remove eight aircraft from European and international routes this winter, as the group looks to use nine A340s more efficiently.
The changes are part of a EUR500 million investment group-wide between now and 2020 with the group aiming to become the first ‘five-star carrier’ in the Western Hemisphere, under plans from new CEO Casten Sphor who joined on 1 May.
“We don’t want to be driven by change in the aviation sector: we want to be among the drivers of it. But doing so demands bold steps forward: our market is no place for half-measures. The Lufthansa Group has often set our industry’s standards in the past. And I see no reason why we shouldn’t do so in the future,” said Sphor.
“In the dynamic and highly price-sensitive market segments, our current platforms only enable us to exploit the growth potential to a limited extent, in view of their sometimes over-rigid cost structures. That’s why we are now seeking to tap new growth areas, by creatively and innovatively refining our products and services in both the airline sector and – especially – related markets. By 2020 we aim to have raised our revenues from our new businesses, our new platforms and our service companies from the present 30% to 40% of our total revenue flow.”
Lufthansa has been going through a cost-cutting SCORE programme which Sphor said will remain ‘equally valid’ when it ends in 2015 to ensure its performance continues.
The board expects an operating profit of EUR1 billion for the current year.
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