Lufthansa to Germanwings to Eurowings. Long haul and lower cost as Lufthansa seeks solutions

CEO Carsten Spohr is building the Lufthansa Group's strategy on three pillars. The first and largest consists of its hub airlines Lufthansa, SWISS and Austrian, where he is seeking to grow margins. The other two pillars are formed by its point to point airline and its aviation services businesses. For both, the focus is on profitable growth.

Lufthansa says its short/medium haul point to point airline will be profitable in 2015. Nevertheless, it is progressively transferring the operation to its Eurowings subsidiary from Germanwings, which itself had been the beneficiary of point to point routes transferred from Lufthansa. Moreover, Eurowings is now also adding long haul routes, with capacity operated by SunExpress.

Germanwings has never been truly low cost, whereas Eurowings' more flexible pilot contract offers the potential for unit cost more like that of other European LCCs, according to Lufthansa. Eurowings was previously almost invisible as a wet-lease supplier of Lufthansa regional capacity, but Lufthansa now aims for it to be the number one point to point airline in the group's home markets - Germany, Austria, Switzerland and Belgium - and the number three in Europe, behind Ryanair and easyJet.