Asian airlines watch Lufthansa's short-haul transformation, wanting change to their own services

Asia's full-service carriers have seen the effects, to varying degrees, of low-cost carriers for over a decade now. While many full-service airlines have formed successful low-cost off-shoots, the full-service legacy model has largely continued in some size unabated. But momentum is starting to build that even where airlines have an LCC, the full-service model cannot continue in its present form. Those airlines without an LCC are under even greater pressure.

Across Asia, airlines are closely watching the transformation Lufthansa is making to its short-haul network, moving flights to wholly-owned lower-cost vehicle Germanwings, which will be heavily hybridised. The plans so far from Lufthansa are efficient replication of proven strategies elsewhere.

What the plan may lack in new innovation, which is not necessarily bad, it offers confidence: Asian carriers have seen new short-haul strategies from countless airlines, but none is perceived as having its house in as much order as Lufthansa. So when the stalwart changes, the industry takes note. Whisper it quietly, but short-haul services on full-service Asian airlines are declining, if not unprofitable. A number of airlines would like a new strategy. Lufthansa may provide the spark.