EUROWINGS Adds New Destinations…..

EUROWINGS Adds New Destinations…..

Eurowings has added 6 new routes that will join the time table in the 4th quarter of this year:

Vienna – Las Palmas/Grand Canary effective October 30 begins 2x/week service (Thursdays and Sundays).

Vienna – Jerez de la Frontera effective October 30 begins 1x/week service (Sundays).

Vienna – Nuremburg effective October 30 begins 11x/week service.

Vienna – Pisa effective October 30  begins 2x/week service (Fridays and Sundays).

Vienna – Fuerteventura effective October 30 begins 2x/week service (Tuesdays and Thursdays).

Vienna – Malaga effective October 30 begins 2x/week service (Wednesdays and Saturdays).

For more information or to book, visit Eurowings.com.

 




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Lufthansa Delays Decision On Brussels

Lufthansa Delays Decision On Brussels

Lufthansa’s Executive Board was set to give their recommendation today on whether or not the Supervisory Board should vote to acquire the remaining stake of Brussels Airlines that LH does not already own.    Over the last few weeks, momentum had been growing that the deal would be announced in April, but not we’ll need to wait til September at the very soonest to see what is decided.  Currently, LH owns a 45% stake in the airline and has until 2017 to exercise its option to buy the remaining 55% from SN Airholding.

The reason given for this delay is to allow Brussels, and Belgium at large to recover after the recent bombings at the airport and metro stations.   On the surface, it looks like a valid reason but in my opinion I think there may be other reasons that go beyond sympathy.

Since announcing the potential buy up of SN, Lufthansa has made it no secret that it is looking for other partners as it tries to boost its Eurowings LCC (Low Cost Carrier) division.   In addition to the SN deal, which still seems most likely, LH has approached SAS as well as Thomas Cook’s ‘Condor’ to see if there is any desire from these airlines to join Lufthansa Group.     Lufthansa has simply said that exploratory conversations had taken place but no decisions had been made.

In my opinion, I don’t think LH tapped the brakes on the SN deal because of the terrorist attacks.   As tragic as the events were, it was not a direct strike on Brussels Airlines and thus would have changed the tenor of the deal with Lufthansa.   In addition, the SN deal was nothing new.   LH has obviously been aware all along what the timeline would be for the deal and since it is already a 45% stake holder, it would be a simple accounting transaction that would close the deal for the remaining 55%.

What I think is happening is that LH sees a very fragmented LCC market in Europe, with far too many players involved which leaves only a few successful LCC operators such as EasyJet and Ryanair.    LH sees opportunities to bolster its line up with potentially larger market players such as SAS or Condor as compared to SN and they simply are going through their due diligence to confirm they don’t miss a better opportunity elsewhere.   With the sovereign ownership group of SAS being motivated to sell the airline, and Thomas Cook wanting to get rid of Condor who is saddled with 800 million euro in debt, LH might be able to get a fantastic bargain and at the same time at something new to the group, while still maintaining the SN stake.

Ultimately however, I truly feel that LH will take the path of least resistance and bring the rest of Brussels Airlines into the fold.

Just my 2¢……

LUFTHANSA Continues To Shop For An Airline…..Next Up, Condor

LUFTHANSA Continues To Shop For An Airline…..Next Up, Condor

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.

 


LUFTHANSA Launches Eurowings Long Haul Sales & Great New Destinations!

LUFTHANSA Launches Eurowings Long Haul Sales & Great New Destinations!

With their official announcement at this year’s ITB event in Berlin on March 3, Lufthansa has formally launched the long haul component for Eurowings.

Eurowings is Lufthansa’s Low Cost Carrier (LCC) solution that is designed to attract holiday and casual travels with a quality product at deeply discounted fares serving unique destinations around the world.   Formally introduced in October of 2014, Eurowings will also ultimately take over the role that Germanwings serves for LH in Europe and will compete directly with other LCC carriers such as Ryanair, Norwegian, Easyjet, and others.

announcement

Lufthansa’s Karl Ulrich Garnadt speaks to attendees at the ITB press conference launching Eurowings sales. Photo courtesy of FlyerTalk’s ‘Oliver2002’.

 

Eurowings’ long haul operation will be based in Cologne/Bonn, Germany with an initial fleet of 2 Airbus A330 aircraft that will be operated by Sun Express, a partnership between Turkish Airlines and Lufthansa.  According to comments made at today’s press conference by Lufthansa’s head of passenger services, Karl Ulrich Garnadt, this fleet will be expanded to include 7 A330 aircraft by the Winter 2016/17 timetable.  According to his comments, the rate of expansion will depend on Eurowings’ success.

As part of the announcement, Eurowings unveiled several new destinations that it will serve including the UAE, Thailand, Cuba and the Dominican Republic.

Eurowings also announced a limited-time offer of discounted fares that will be in effect through March.   Fares between Cologne and Dubai will begin at only €99, Thailand for €199, and Cuba or the Dominican Republic (Punta Cana) for only €229.   After March, passengers can expect fares to go up €20 to €50, depending on the destination and fare class.

Speaking of fare classes, Eurowings also unveiled their 3-tiered fare structure that is based on the Germanwings concept of BASIC, SMART, and BEST.

Predictably, the BASIC fare class will be the lowest cost option but will also come with the fewest options.  BASIC fares will have a baggage allowance but any other amenities such as inflight meals, etc. would come at an additional cost.  No mileage would be earned towards Miles & More account balances.

SMART fares, available for approximately €50 more, will include a baggage allowance, inflight dining and the ability to earn miles in Miles & More.

BEST fares will include a ‘Premium Economy’ seat identical to what is being being rolled out by Lufthansa in their mainline fleet.  These fares will include a higher baggage allowance, priority security and boarding, lounge access, enhanced dining and the ability to earn a higher amount of miles towards Miles & More balances as compared to the SMART fare.

 

The 'BEST' Fare seat:  Identical to the Premium Economy seat now available on Lufthansa mainline.

The ‘BEST’ Fare seat: Identical to the Premium Economy seat now available on Lufthansa mainline.

 

All passengers will have access to Inflight Entertainment (IFE) systems at their seat.   However, BEST fare passengers will be given access to the entire library while SMART and BASIC passengers will need to pay for access to certain parts of the IFE offering.  Passengers can also make use of Lufthansa’s broadband system which allows for the use of personal smartphone, tablet and other wifi enabled hardware to access the IFE system.

 

Eurowings booking is now available at www.Eurowings.com

 

And in closing, a big HAT TIP to FlyerTalk’s Oliver2002 who was in attendance at the Eurowings press conference at the ITB show in Berlin and provided me with some of the details from the event.

 

Lufthansa’s Eurowings Set To Debut First A320 This Sunday

Lufthansa’s Eurowings Set To Debut First A320 This Sunday

This Sunday, February 1, marks the first time that an A320 will fly under Lufthansa’s Eurowings LCC subsidiary.   The ‘inaugural’ flight will take place between Hamburg and Prague – departing Hamburg at 10:55a and arriving in Prague at 12:00p.  The aircraft will also sport Eurowing’s new livery.

 

D-AIZQ will be the first Eurowings A320 to enter service.

D-AIZQ will be the first Eurowings A320 to enter service (Photo: Lufthansa)

 

Eurowings is part of a larger program known as ‘WINGS’ which focuses on the ‘leisure’ travel market and competes directly with other LCCs within Europe such as Ryanair, Easyjet, and others.  The WINGS fleet serving Europe and nearby medium-haul destinations will be comprised of an A320 fleet.   The A320s will be replacing the 23 Canadair CRJ900s currently being used by Eurowings.  In all, 23 A320s will be in the fleet.  12 will be transferred from Lufthansa and 10 are on order from Airbus.

Plans call for all of Lufthansa’s LCCs including Germanwings to be consolidated into Eurowings, which will ultimately be Lufthansa’s only LCC division.   This realignment should be completed by the end of this year and will feature destinations worldwide.

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