by Lufthansa Flyer | Feb 1, 2017 | Etihad, Featured, Lufthansa |
As I mentioned last night, a press conference was held this morning in Abu Dhabi between by the leadership of Lufthansa and Etihad Airways as they announced an expansion of their relationship.
If you remember from yesterday, I wrote about Lufthansa assisting Etihad’s MRO operations as well as Lufthansa’s LSG Skychefs catering business to start providing catering for Etihad flights. Here are additional details:
The deal for the aircraft maintenance and catering is worth $100 million. The catering part of the agreement includes a 4 year contract by which Lufthansa will provide all of the catering services for Etihad flights in 16 cities through Europe, the Americas, and Asia. LSG Skychefs will be Etihad’s largest supplier of on board catering outside of Abu Dhabi (Etihad’s home base).
The MRO part of the deal includes a ‘Memorandum of Understanding’ that will see Lufthansa Technik and Etihad work as a team to provide a variety of maintenance services to Etihad’s fleet as well as Etihad’s partner airlines such as Alitalia and Air Berlin.
Also part of today’s announcement was the fact that there will be expansions to this relationship as time goes on. It was noted that there may be additional agreements covering passenger services and cargo.
A new part of their cooperation that was announced today stated that Etihad will move its operations in Munich and Frankfurt to terminals where Lufthansa flights operate from. For Munich, this means no longer will Etihad have to suffer in the dreary Terminal 1. They’ll be moving their operations to Terminal 2 and Satellite Terminal 2. In Frankfurt, this means that Etihad will now fly from Terminal 1, whereas perviously they were operating out of Terminal 2.
This makes all the sense in the world because of the new codeshare arrangements that have been created between Etihad and Lufthansa. It would make for bad logistics if passengers had to travel between terminals and go through multiple security checks to get to their codeshare flights.
And no, there was no announcement about Etihad joining Star Alliance.
by Lufthansa Flyer | Feb 1, 2017 | Featured, Lufthansa, Passenger Experience |
Carsten Spohr, Lufthansa Group’s CEO, has suggested that the airline plans to reduce fares for passengers during 2017. His comments came as part of an interview with German newspaper ‘Westdeustchen Allgemeine Zeitung’.
In his comments, he hinted that the fare cuts this year would be less than the fare cuts that took place during 2016, pointing to slightly higher fuel expenses that are expected during 2017. To offset the impact of a modest bump in fuel costs, he suggested that savings would be found in other areas of their income statement.
His comments tie into the ongoing negotiations with his pilots as they try to strike a labor peace that has been elusive thus far: ‘For this reason, we are striving for lower long-term airport charges, for example, and we have to create competitive and thus future-proof structures in personnel costs.”. These comments also came at the same time that a negotiating period between the airline and the pilot’s union came to an end without a resolution.
He did not suggest specific percentages as far as fare cuts are concerned but in reading between the lines I would assume that the cuts will be in the low single digit percentage point range.
As part of the interview he did plant a hint that certain markets may be at risk for continued Lufthansa service: “There are market segments in which you can no longer be profitable with our personnel costs of our core brand Lufthansa.” He further added that since passengers expect lower fares, a correlating reduction in expenses must be executed. Again, suggesting to labor that with a reduction in fares necessary to remain competitive, labor must move towards accepting concessions to help Lufthansa remain competitive.
by Lufthansa Flyer | Jan 31, 2017 | Air Berlin, Etihad, Featured, Lufthansa |
Ahead of an announcement expected from Etihad and Lufthansa tomorrow from Abu Dhabi, details are starting to emerge regarding a deepening relationship between the 2 carriers.
Building on recent developments including Lufthansa’s take over of certain Air Berlin aircraft and routes in order to reduce the burden for Etihad (A large stake holder in AB), it appears now that Etihad is set to further seek Lufthansa’s assistance as it tries to re-sort itself.
Coming from various news outlets, including Bloomberg, it appears that Etihad is set to transfer their MRO operations (Maintenance / Repair / Overhaul) to Lufthansa Technik. Additionally, Etihad will transfer their catering operation to Lufthansa’s LSG Skychefs. There is also the potential for the relationship to expand to include Lufthansa handling much of Etihad’s security and ground services in certain parts of the world where both airlines are present. I expect we’ll find out the timing of these transactions during tomorrow’s event.
There has also been some chatter regarding the potential of Etihad joining Star Alliance, but that seems to be a bit of a stretch at this point based on Etihad’s involvement with other partners that are in direct competition with Star Alliance. But one never knows what can be announced.
There may be more to the announcement tomorrow, so you may see a follow up to this post.
