Lufthansa group flights from BEG

my2cents
Posts: 8
Joined: 25 Apr 2016, 21:24

Lufthansa group flights from BEG

Postby my2cents » 28 May 2016, 17:24

I'd appreciate thoughts from ExYu bloggers.

Given that Lufthansa group is the 3rd largest oprerator at BEG with 6k flights and ~650k passengers, would it make sense to have those flights operated by affiliate airline based in Serbia. Lufthansa could assist with planes ( lease them to the company or transfer as equity stake in the new company) . Austrian did something like that by transferring Fokkers in exchange for equity in the company.

2-3 planes would be in LH/LX/OS or Star Alliance livery and operate flights to respective hubs. This way Lufthansa maintains the same product ,unlike the codeshare arrangements where there are inconsistencies, but would save costs.

LaBno
Posts: 10
Joined: 12 Oct 2015, 21:26

Re: Lufthansa group flights from BEG

Postby LaBno » 28 May 2016, 23:32

First of all, to be honest, I don't see it happening anytime soon.

But regarding your question 'would it make sense?':
If I'm right, Lufthansa group operations at BEG consist of the following airlines, with destinations:
  • Austrian (Vienna)
  • Lufthansa (Frankfurt, Munich)
  • Germanwings (Stuttgart)
  • Swiss Air (Zürich)
So of these 5 destinations, 4 are mostly aimed at transfer passengers, 1 at point-to-point travel.
If an affiliate airline out of Belgrade would operate these flights, that would mean people will feel like they are flying on two different airlines when for example doing a BEG-FRA-JFK trip; BEG-FRA with the given affiliate airline, FRA-JFK with Lufthansa. One could wonder if this is useful.

You also say this would save costs. I'm not too sure about that one. Of course, labour costs in Serbia are considerably lower than in e.g. Germany, but operating a franchise airline, based in Belgrade brings with it a lot of other costs as well. I don't think that this measure would save money, in the end.

And IF such a thing as you portrayed would happen, why exactly at BEG? There are a lot of destinations the Lufthansa group serves more frequently, with a more diverse route map. So why do you think this would be at BEG, and not somewhere else at first?

But in the end, I really like your idea! I just don't think it's gonna happen.

my2cents
Posts: 8
Joined: 25 Apr 2016, 21:24

Re: Lufthansa group flights from BEG

Postby my2cents » 30 May 2016, 23:00

Thanks for posting.

Planes would have look and feel of Lufthansa group, they all have pretty much the same cabin seats, the only difference being the colour, I guess. I haven't counted Germanwings here.
It would be very similar (short of identical) look & feel.

Codesharing dilutes the brand, little control over the service, while franchise is different.

With fuel costs this low (although climbing) personnel accounts for a larger share of overall costs. I'd say that cost of locally based pilots and crew would be at least 30% lower than in Germany. This way you can compete better with LCCs. This is something between Eurowings and own flights. Perhaps Lufthansa plans to base Eurowings planes in Serbia, which would counter my idea.
I think that such arrangement could deliver more frequencies and options for LH Group. From current 7 to ~9 daily.
And who knows, perhaps such company could service TK , with a dedicated plane 3 flights per day (2x BEG and 1x LYKV) .

my2cents
Posts: 8
Joined: 25 Apr 2016, 21:24

Re: Lufthansa group flights from BEG

Postby my2cents » 30 May 2016, 23:07

Forgot to add, I thought BEG since I'm from Serbia, but I wouldn't exclude other destinations. BEG has a good combination of frequencies and low labour cost. Having such affiliate/franchisee in EU country would be even better, due to ease of setting up and passporting AOC, but it would be a trade off as other countries have higher labour cost.

I see one big hurdele in LH unions.


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