And now it comes to Lufthansa

[Arte Et Marte]

Lufthansa Vies With Air France for Low-Cost European Cure - Bloomberg


Bearing in mind the anguish that PP34 at BA has caused certain posters on this forum, this quote jumped out from the article:

While pilots moving over from Lufthansa won’t be paid any less, new recruits would join on lower rates, he said.

[Clandestino]

You can't win the race to the bottom if you don't participate in it.

[MaxReheat]

Have you noticed how the management drivers, those heroes in the great 'management of change' stakes (and earn a great big bonus for reducing the headcount) for 'the race to the bottom' never include themselves or the other drones of senior management in aforementioned race?

[Sir George Cayley]

Plus ça change (plus c'est la même chose).

[Iver]

Lufthansa has had its own aviation consulting firm for many years - and yet even they haven't been able to "consult" effectively enough to help LH avoid these challenges. I wonder if Lufthansa would choose to hire its own consultants nowadays. Don't worry - in a few years we will unfortunately see only LCCs in Europe plus maybe 2-3 legacies (maybe BA, LH and AF/KL) with large LCC divisions. Increasing competitive pressures from Ryanair, Easyjet, Vueling, Wizzair, Norwegian and perhaps Air Berlin will make current legacy contracts completely unaffordable... Many of these public LCCs have to increase their growth rates (and maintain or grow margins) to keep their stock prices high - the competition in the region will only increase.

Sad, but I can imagine Emirates, Qatar and that other UAE carrier salivating at the long lines of "cheap" European pilots looking toward the ME in response...

[Hand Solo]

Solidarity boys! All they've got to do us stick together and none if this will happen.

[Ancient Observer]

What Studi reports reflects what has gone on in a number of sectors in Germany. The TUs have maintained their controls, but have quickly agreed to and implemented structural reforms.
It is now cheaper to deliver post in Germany than it is in the UK. And the posties get paid more.....
Ditto with Engineering. In the few cases that Mr Bosch still makes stuff in Germany, it does so cos it is cheap and effective - aswell as being, well, Bosch and German.

Did they do this in greece? No.

[4468]

After 911 we had a big gold digging mentality in European aviation with the advent of the LoCo model. A lot of LoCo's were founded at that time.

To me this seems a much better setup than just let go of this market like BA and the BA pilots did with GO and leave it for EJ and Ryanair to take over

Of course BA both set up, and had plans to sell GO long before 911.

[PPRuNeUser0204]

Great post Studi.

It is now cheaper to deliver post in Germany than it is in the UK. And the posties get paid more.....

Ancient Observer, how exactly does this work given the UK mentality of driving all costs down (including employee related ones?).

[warmkiter]

Hi

Lufthansa had the general staff meeting ( Personalversammlung ) last week and the represenatatives from the union and the management had their chance to speak to the employees. I dont want to get to the details, but at some stage i felt embarassed by the lack of manners demonstrated by our top managers.

It was clear how far away the positions of the managemant and the unions are. We had some seatchanges in the top management and the new guns are trying to make a point as tough guys.

Both of our last 2 CEOs have had their strike at DLH and mr. Franz will get his too. The senior management he has chosen are responsible for the complete lack of communication and massive loss of faith into our management. The course of the decicions made, do steer clearly into a huge conflict. Right now the management is trying their arsenal at Austrian Airlines and hoping to use the same artillery back home. There are no signs of deescalation, the course goes direct into the red cell on the ND.

I dont know about other airlines, how united they stand when the shiite hits the fan, but when it comes to the DLH cockpit you can count on enough support from the ranks.

Its going to be a hot summer....

[SpGo]

A couple of questions Studi:
1) How does a shift of airframes from DLH to GWI create more upgrade opportunities?
2) If a GWI pilot has the same T and C's as a DLH pilot how can he be cheaper for the company?

[jetopa]

I'm a consumer, too

... so I'd like to buy things as cheap as possible.

So, I want a cheap airline ticket for myself. But I also want

• a good service on board
  
• clean, nice-to-look-at and well maintained airplanes
  
• well trained crews
  
• a reasonable baggage-allowance
  
• convenient connections and
  
• comfortable facilities at the airport.

So that's WhizzAir's or Ryanair's price levels at LH's or Singapore's service levels. Will that work?

If the LH management thinks it can compete with Ryanair, they're dead wrong. MOL is probably already rubbing his hands in expectation of this uneven fight (Datei:Ryanair auf wiedersehen Lufthansa.jpg).

LH appears to walk into a trap and as a consumer I can see, that I am not impressed about what I am getting already today:

• an outdated business class on long haul services
  
• an apron parking position in FRA when arriving from a long haul flight (and then a nice, crowded bus ride)
  
• crappy seats in Eco on the short hauls
  
• pitiful rubber-like sandwiches on inner European trips. I could go on.

I don't know what the smart solution is, but purchasing the wrong airlines (and then selling them with a massive loss) while downgrading the service of their main product won't work, I'm afraid.

[captplaystation]

The time may arrive relatively soon when competing with Ryanair becomes easier, for 2 reasons.

First, a big chunk of their "war-fund" has been amassed by buying airframes from Boeing at (lets say) 50% of list value & selling them on, post-delivery, to the leasing agencies at (perhaps) 90% of list value.
300+ aircraft x 30? million bucks means you can sell those tickets real cheap.

Either not paying, or paying in the cheapest country, your employees social charges, how much has that netted them this last 10+ years ?

Both of these scenarios are shortly to be terminated. At this point it will be easier to compete on quality/price, as that headline 10€ fare blinding everyone will soon be a thing of the past.

Doubt they will go bust/close shop, but, for sure the ticket prices are going up, & the "price -sensitive" ( ) / classy / go for a weekend on the p1ss pax that spend their weekends going from Liverpool to Barcelona will cease to exist.
I can't find too many reasons to regret that, having looked aghast in the past at Ryanairs "weekend crop". that I have dumped for the weekend in some previously unsullied spots. Cringe doesn't begin to cover it

[Wirbelsturm]

The time may arrive relatively soon when competing with Ryanair becomes easier, for 2 reasons.

Mol himself admitted that the time for getting profit from tickets was rapidly approaching for Ryan Air during an interview for the Observer business section a year or so ago.

Those factors labelled by Cpt Playstation plus the unwillingness of European airspace/aerodrome operators to give Ryan Air a 'cheap deal' together with the scrutinisations of the European Competition commission into unfair trade deals will cause the Sun readers to have to dig a little deeper into their pockets.

[SpGo]

So GWI will be the German version of Lufthansa-Italia?

[9.G]

recreation of the butterfly effect

Amusing to see German pilots being reluctant to face the dire reality. While their managers are faced with the ugly face of reality and understand there's no other way to survive but to let the brutal market forces prevail, delusional pilots still believe they can beat the market by perpetual attempts to recreate famous butterfly effect. The history sends a very clear message market forces will always prevail no matter how hard or long lasting the stand-off might be. There's no better example to this than Euro disaster. Take a step back and ask yourself what's the difference between a LOW CO and a legacy? The answer is the price. If the LOW CO doesn't fit into LOW CO cost structure any more the fares aren't LO CO any more. The air always flows from high into low so does the money. Having said that I wouldn't give in a inch if I was employee and enjoy it while it lasts. Another great lesson of selfish pilot nature.

[hetfield]

So GWI will be the German version of Lufthansa-Italia?

LHI is dead....

[Dan 98]

Interesting looking at this, say you wanted a weekend in Paris going tomorrow for 2 x Adults departing from London returning Sunday:

BA Economy - Heathrow - CDG = £346.70
EasyJet London LTN - CDG = £518 (No luggage)

Eurostar - £508.....

LCC is the most expensive!!!

[RAT 5]

"DLH needs to understand that flying every route and painting the world blue & yellow is not a profitable strategy"

So why doesn't RYR buy DLH and save money on the paint scheme?

[9.G]

So why doesn't RYR buy DLH and save money on the paint scheme?

Why do u think LH sold Condor? Let's compare apples with apples here. Let's take CGN-PMI in July over the weekend as probably the most popular route between GWI stronghold and Spain. FR is 138 Euro a return trip and GWI is 258 with the very same terms and conditions otherwise. While FR is getting 60 aircrafts next year GWI still doing kansas city shuffle with round bout 30 aircrafts. I totally understand the pilots of GWI who crave for LH working conditions alas their sole purpose is to slow down the British/ Irish invasion but even that they're failing to do. Once they became a handicap to LH managers GWI will befall the very same fate as Condor. Inaptitude of LH managers to tackle the unions is a blessing to O'leary. Once those invincible pilots hit the road as contractors the reality will get hold of'em inevitably. Sad but true.