Eurowings, Lufthansa’s Low-Cost-Carrier unit, today unveiled a sponsor relationship with Borussia Dortmund of Germany’s Bundesliga.
As part of the relationship, Eurowings will be the official carrier of ‘BVB’ and will transport the team to their matches aboard one of their A320 aircraft that will be painted to honor the team.
Here’s a peek of what the new livery will look like:
Courtesy: Eurowings
Here is the news conference on May 19 announcing the sponsorship details:
Over the past several days, you’ve seen my posts about Lufthansa looking to acquire or ‘tie up’ with a partner in an effort to execute a quantum leap in its Low Cost Carrier unit, Eurowings.
Up til now, Lufthansa has approached the ownership of SAS to discuss the potential of a tie up so that SAS could meld into the Eurowing unit and focus on the LCC business with its world-wide network. SAS ownership, primarily comprised of Sweden, Norway, and Denmark is keen on the idea since the sovereign ownership has been looking to unload their share of SAS back into private hands. The other option, and the one that seems most likely, is Lufthansa’s acquisition of the remaining stake of Brussels Airlines, of which LH already owns 45%. LH has until next year to exercise the option, but it appears as though the decision can be made in the coming weeks.
The newest option is the idea of acquiring Condor from the Thomas Cook Group. Condor, for you avgeeks, was originally founded by a group that included Lufthansa in 1955. LH originally was a 25% stake holder until 1959 when it acquired the entire airline. Lufthansa began selling shares of Condor to Thomas Cook in 2006, and was completely divested of Condor in 2009.
This recent develop has Lufthansa discussing the option of either a tie-up or a complete acquisition of Condor and their 46 aircraft. Predictably, LH and Thomas Cook have both declined comment on the topic.
However, a deal with Condor would not be without its of baggage. Condor is currently saddled with 800 million Euro of debt and reported a loss of over 10 million Euro for their most recent fiscal quarter. Should Lufthansa look to actually acquire Condor outright, it would probably simply take over the debt obligations and pay Thomas Cook next to nothing for the ‘privilege’. Thomas Cook would most likely be content to rid themselves of the liability.
So why is Lufthansa meeting with all of these potential partners?
My theory and opinion, is that Eurowings is not doing as well as expected and their planned growth trajectory has been revised downward. Certain routes launches have been delayed and it appears that the fleet is not growing as quickly as it needs to in order to gain market share. Though LH executives speak optimistically of Eurowings, I can’t help to think that they are doing this because they have to, but have their reservations about the prospects for it. With a tie up or acquisition, it would immediately add a substantial amount of aircraft and expand the Eurowings timetable dramatically, instantly making them a serious competitor for Euro LCC’s such as Ryanair and EasyJet.
What do I think happens?
I think LH is shopping around just to execute a bit of due diligence before it acquires the remaining stake of Brussels that it doesn’t already own. Brussels Airlines is profitable and is already well integrated into the LH Group, so it obviously offers the path of least resistance. What I’m wondering is what will the SN employees have to say should Lufthansa relegate them to the LCC market, offering low fares along with low frills. Brussels is known as a very solid airline because of their outstanding Business Class product on long haul flights and a very strong route network in Europe and Africa. I wonder how that changes should the Eurowings culture moves in.
