Lufthansa has announced that it intends to launch a new inter-continental and intra-European ‘Low Cost Carrier’ airline designed to attract additional passengers.
The new model, WINGS, will be focused on attracting the budget-minded traveler who typically purchase tickets based on price, not worrying about loyalty programs, on board amenities, etc. Initial plans call for WINGS being a multi-tier program based on the Germanwings model.
As far as the long haul elements of WINGS, Lufthansa is currently studying 2 options and will decide in the near future which route it will take.
Option 1 would have Lufthansa going alone at the endeavor and potentially retrofit several of its existing long-haul aircraft into 1 or 2 class configurations. Option 2 has Lufthansa teaming up with another airline an act as partners in the new airline. At the moment, Lufthansa is in advanced discussions with TURKISH AIRLINES and the 2 sides are trying to determine if such a venture makes sense for both sides.
If an agreement is reached with TURKISH, expect to see a fleet of 767 and A330 aircraft begin to enter service for the Winter 2015/16 timetable. Initial plans call for up to 7 aircraft to make up the new intercontinental fleet.
Additionally, Lufthansa is facing a decision as to what to do with 9 of its A340 aircraft. LH is looking at ways to put these aircraft to work on underperforming routes or to launch new routes in a manner that aligns with the WINGS Low Cost Carrier model. No decision have been as of yet as LH is considering internal and external partnership options.
Lufthansa’s decision to go in this direction is in direct response to the tremendous pressure they face from Low Cost Carriers (LCC) that are prevalent in Europe, the Middle East and Asia. LCC Passengers are looking for the lowest possible price points for their travels and apparently are not concerned with amenities and other benefits that come with flying with a ‘Mainline Carrier’.
I see this as a bit of an experiment taken on by LH to determine if there is viability in long-haul LCC operations. Only a small handful of airlines operate long haul LCC routes so the success/fail rate has not been established enough to identify trends.
After reading through Lufthansa’s release yesterday, I got the sense that the attitude that they are adopting is “ACT, OR BE ACTED UPON”. In such a competitive industry, its absolutely the right vision to have. But the success will obviously depend on the execution.
I’ll update you on what the WINGS concept will look like within Europe in another post later today. I spent most of yesterday helping several family members plan flights today to Slovakia to attend my Grandmother’s funeral (99 years old and had the chance to watch her beloved Brazilian soccer team one last time) and did not have much time to interpret all of the information that Lufthansa released yesterday. At the moment, I’m enroute to Vienna so I’ll try to find a window later today to provide the update.
