avt100
26th Feb 2002, 05:31
<a href="http://luchtvaart.pagina.nl" target="_blank">http://luchtvaart.pagina.nl</a>. . . .German national carrier Deutsche Lufthansa AG does not plan to combat growing competition from budget carriers by setting up its own low-fare unit, Ralf Teckentrup, board member with responsibility for route network management, said in an interview with Handelsblatt.
Teckentrup argued that a budget airline would require completely different structures from those currently in place. "If we were to enter this market segment it would have to be with new staff and a totally new product. It would have to be completely separate from Lufthansa the classic network-airline," he said.
The world's traditional, scheduled airlines have been pondering for months how to meet the challenges posed by growing expansion of low-fare carriers on their markets. "With growth rates of 20–25%, of course it is a segment that needs to be looked at," Teckentrup said.
Companies like Ryanair, Easyjet, Go and Buzz are increasingly fanning out their route networks across Europe and have also started to focus their attention on the German market. Though most traditional airlines have so far done little apart from closely watching the newcomers from the sidelines, each report of spiralling growth rates in the budget segment fuels their desire to participate.
But Teckentrup said Lufthansa would not follow the example of its Star Alliance partner BM British Midland, whose newly launched "bmibaby" operates under independent management. His biggest objection is that the unit, which offers flights to Europe for as little as £25, is linked too closely to the parent company, which he sees as a sure way of breeding in-house competition.
British Airways can tell a similar tale. Its low-fares carrier Go, which has since been sold, served some of its routes and started to make inroads into its passenger numbers.
This was definitely not a strategy that Lufthansa would pursue, Teckentrup stressed. But he declined to comment on growing industry speculation that it might soon offer cut-price flights via an outside carrier, with Lufthansa remaining responsible for network and traffic management and control. Only the flight operations would be carried out by the partner airline.
Ryanair's chief executive Michael O'Leary recently forecast that Lufthansa will soon start losing customers to budget airlines but Teckentrup disagreed. "The strategies differ so widely you might as well compare us with the railways. We offer 30,000 connections daily while Ryanair operates 94 point-to-point services." Given these two very different business models there was no reason for the airlines to get into each other's way, he argued.
Meanwhile, regional budget carrier Germania on Monday announced the expansion of its German services. Starting in April, capacity on its Berlin to Cologne/Bonn route is to be doubled to 14 flights a day. A single ticket is to cost no more than 77 euros. In autumn, the carrier will also launch a Berlin-to-Munich service. . . :)
Teckentrup argued that a budget airline would require completely different structures from those currently in place. "If we were to enter this market segment it would have to be with new staff and a totally new product. It would have to be completely separate from Lufthansa the classic network-airline," he said.
The world's traditional, scheduled airlines have been pondering for months how to meet the challenges posed by growing expansion of low-fare carriers on their markets. "With growth rates of 20–25%, of course it is a segment that needs to be looked at," Teckentrup said.
Companies like Ryanair, Easyjet, Go and Buzz are increasingly fanning out their route networks across Europe and have also started to focus their attention on the German market. Though most traditional airlines have so far done little apart from closely watching the newcomers from the sidelines, each report of spiralling growth rates in the budget segment fuels their desire to participate.
But Teckentrup said Lufthansa would not follow the example of its Star Alliance partner BM British Midland, whose newly launched "bmibaby" operates under independent management. His biggest objection is that the unit, which offers flights to Europe for as little as £25, is linked too closely to the parent company, which he sees as a sure way of breeding in-house competition.
British Airways can tell a similar tale. Its low-fares carrier Go, which has since been sold, served some of its routes and started to make inroads into its passenger numbers.
This was definitely not a strategy that Lufthansa would pursue, Teckentrup stressed. But he declined to comment on growing industry speculation that it might soon offer cut-price flights via an outside carrier, with Lufthansa remaining responsible for network and traffic management and control. Only the flight operations would be carried out by the partner airline.
Ryanair's chief executive Michael O'Leary recently forecast that Lufthansa will soon start losing customers to budget airlines but Teckentrup disagreed. "The strategies differ so widely you might as well compare us with the railways. We offer 30,000 connections daily while Ryanair operates 94 point-to-point services." Given these two very different business models there was no reason for the airlines to get into each other's way, he argued.
Meanwhile, regional budget carrier Germania on Monday announced the expansion of its German services. Starting in April, capacity on its Berlin to Cologne/Bonn route is to be doubled to 14 flights a day. A single ticket is to cost no more than 77 euros. In autumn, the carrier will also launch a Berlin-to-Munich service. . . :)