Lufthansa plans low-cost airline for Asia

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Germany-LufthansaGermany’s national carrier Lufthansa, one of the world’s largest airline groups, has said it is considering to launch a long-haul budget carrier to serve routes from Europe to Asia in a bid to compete with rival operators from the Gulf states such as Emirates, Qatar Airways and Etihad.

Lufthansa may form an intercontinental subsidiary similar to its Germanwings short-haul unit, Chief Financial Officer Simone Menne said at a press briefing in New York on March 25. Other options include an alliance with a Middle Eastern or Asian airline.

Lufthansa is reviewing its strategy with Asia-Pacific passenger traffic poised to expand at a 6.7 percent annual rate through 2016, according to the International Air Transport Association.

The German company won’t be able to exploit that market unless it changes course, Menne said. At present, Thailand and Singapore are major hubs for Lufthansa within ASEAN with daily flights to these destinations.

Establishing a low-cost long-haul business would mirror plans of Norwegian Air Shuttle AS, which is poised to add flights to cities including Bangkok.

However, analysts say that the low-cost long-haul model is a business model that has not been proven so far. Very few airlines are offering such services, for example AirAsia X. Philippines’ Cebu Pacific has announced to launch trans-pacific flights later in 2013.

 

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Reading Time: 1 minute

Germany’s national carrier Lufthansa, one of the world’s largest airline groups, has said it is considering to launch a long-haul budget carrier to serve routes from Europe to Asia in a bid to compete with rival operators from the Gulf states such as Emirates, Qatar Airways and Etihad.

Reading Time: 1 minute

Germany-LufthansaGermany’s national carrier Lufthansa, one of the world’s largest airline groups, has said it is considering to launch a long-haul budget carrier to serve routes from Europe to Asia in a bid to compete with rival operators from the Gulf states such as Emirates, Qatar Airways and Etihad.

Lufthansa may form an intercontinental subsidiary similar to its Germanwings short-haul unit, Chief Financial Officer Simone Menne said at a press briefing in New York on March 25. Other options include an alliance with a Middle Eastern or Asian airline.

Lufthansa is reviewing its strategy with Asia-Pacific passenger traffic poised to expand at a 6.7 percent annual rate through 2016, according to the International Air Transport Association.

The German company won’t be able to exploit that market unless it changes course, Menne said. At present, Thailand and Singapore are major hubs for Lufthansa within ASEAN with daily flights to these destinations.

Establishing a low-cost long-haul business would mirror plans of Norwegian Air Shuttle AS, which is poised to add flights to cities including Bangkok.

However, analysts say that the low-cost long-haul model is a business model that has not been proven so far. Very few airlines are offering such services, for example AirAsia X. Philippines’ Cebu Pacific has announced to launch trans-pacific flights later in 2013.

 

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