Lufthansa Creating New European Shorthaul Low Cost Carrier

Lufthansa board made a decision on Wednesday to create a new low cost carrier (LCC) that would handle Lufthansa’s European traffic that doesn’t touch Frankfurt or Munich. Lufthansa plans to merge its existing Germanwings (and probably others too) operations to this new entity. The projected start date for this new airline is January 1st next year.

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It is interesting to see how this will play out for Lufthansa. Airlines haven’t been traditionally very successful with the airline within an airline concept. United has its Ted (The End of United as it was called) experiment, Delta had Song, US Airways had Metrojet etc.

There is only handful of successes. Qantas’ JetStar (Death Star per Qantas crews) is doing well as is Singapore Airlines Silk Air subsidiary. It is too early to tell how the latest member of Singapore Airlines airline family, the long distance discount operator Scoot, will do at the end.

Lufthansa’s obvious intention is to lower the cost of their European flying. Do they expect the current employees on these domestic routes just to go to work for the new carrier and take a pay cut in the process?

Conclusion

Many European airlines are claiming that their European routes are not profitable. Some have partially outsourced these to 3rd parties that are flying under the carriers flag i.e. Finnair’s cooperation with FlyBe.

Personally, when I am flying on Lufthansa, I know very well what to expect. If they have a discount carrier working as a feeder airline, how are they going to ensure that the same level of service is maintained? Of course Lufthansa might just forget all the services and just compete on the price.

But then why you wouldn’t just choose to fly one of the real discount carriers like Ryan Air or Easyjet in the first place?

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