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IN a market that is divided between low-cost, no-frills carriers and more traditional, national airlines, German airline Lufthansa is seeking to differentiate itself.
Dieter Grotepass, the airline’s head of sales for the UK and Ireland, says that Lufthansa is now giving its customers the option of “mobility à la carte”.
The phrase, coined by chief executive and executive board chairman Wolfgang Mayrhuber, demonstrates the range of services offered by the airline.
Customers can opt for anything from the “menu”, from a low-cost Germanwings flight from Edinburgh to Cologne for as little as £26 excluding taxes, through to traditional Lufthansa flights and even to chartering an executive jet. The latter service costs upwards of £5000.
It is a business approach which has clearly worked. While other national carriers have suffered – Italian carrier Alitalia is just the latest to hit a tailspin, with auditors last week refusing to sign off on first-half results – Lufthansa is in profit.
In August the company announced an operating profit of €253 million (£172m), a very creditable set of results in a time of high oil prices. Additional fuel costs have added €1 billion (£680m) to the airline’s cost base.
The figures are also impressive given the German economy’s lacklustre performance. However, 60% of the traffic is generated from outside Germany. Profits to date have benefited from financial hedging that Lufthansa made against rising oil prices but will prove a bigger challenge in the future once existing hedging arrangements cease.
Management at Lufthansa is endeavouring to keep costs down. Recent efforts to optimise services have resulted in the saving of the financial equivalent of four Boeing 737s.
Grotepass says: “It is a constant process of looking at our costs and looking to see if we are optimising our services. If we can save in one area then we can add to our routes or our frequency.”
He says he is keen to expand flights from Scotland – including looking at the possibility of the first flights from Glasgow – and from the UK as a whole, but is battling against cases for expansion being made in other parts of the carrier’s network.
As it is, Lufthansa is the biggest non-British carrier out of Heathrow Airport in terms of the number of flights.
Lufthansa’s Edinburgh operation, one of seven airports it operates from in the UK, began in March 1999 with a twice-daily flight to Frankfurt, operated by aircraft leased from bmi British Midland, a partner of Lufthansa’s in the Star Alliance.
Since March 2002 that has expanded to three daily rotations between the Scottish capital and Frankfurt using Boeing 737s. More than 70% of the Edinburgh passengers transfer to onward locations from the German airline’s hub, with recent additions including twice-daily flights to both Beijing and Shanghai. Other additional services include flights to Ukraine and to Sofia in Bulgaria.
Lufthansa’s most recently announced addition to its flights roster is to Doha in Qatar. From January 2006, the airline will operate three weekly flights from Frankfurt to Doha after a stopover in Kuwait.
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