Lufthansa plans to reduce long-haul unit costs by 10% in the past three years compared to 2011 levels, according to reports in employee magazine Lufthanseat (airliners.de/dpa-AFX, 03-Dec-2012). Unit costs are expected to reduce by 20% by 2025 from these levels. The project, called SPRINT, is part of the airline’s plans to improve annual profitability by USD1.5 billion by the end of 2014. Key to achieving this objective is a fuel-management system to optimise fuel usage, the introduction of more fuel efficient aircraft, increased aircraft utilisation rates, and the removal of first class on underutilised sectors. The airline is also renegotiating contracts with suppliers and service providers. The carrier is seeking to reduce expenses to offset rising fuel prices and competition from Gulf carriers.
Lufthansa to reduce long-haul unit costs by 10% in three years, by 20% by 2025
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Jointly owned by Turkish Airlines and Lufthansa, SunExpress and its German counterpart brought about a consolidated result that fell into loss in 2016 as passenger numbers and revenue both declined. When the observer scratches beneath the surface of the headline figures, a picture of significant strategic change at SunExpress Germany starts to emerge.
The larger Turkish SunExpress has maintained its focus on Turkey-Germany routes, whereas SunExpress Germany has abandoned this country pair. It has instead developed leisure routes from Germany to elsewhere in Europe and in North Africa, in spite of not having an obvious competitive advantage in those markets. Within these new market areas, SunExpress Germany has undergone substantial changes in its route portfolio. Lufthansa wetleases capacity from SunExpress Germany for its Eurowings low cost operation and this may help to make some sense of these outwardly random network changes.
airberlin restructuring: summer capacity minus 31%; long haul growth; threat of Eurowings looms
The main elements of Air Berlin Group's latest restructuring are taking shape. In Feb-2017, 38 of its aircraft began a wet lease agreement to operate on behalf of the Lufthansa Group. On 26-Mar-2017, the majority of airberlin's tourist routes were reassigned to NIKI, prior to the transfer of its Austrian subsidiary to a new airline that will also include TUIfly and be part owned by Etihad. This leaves the core "new" airberlin airline to focus on developing its network operation from its hubs in Duesseldorf and Berlin.
Data from OAG for the summer 2017 schedule show that airberlin's total seat numbers will be reduced by 31% versus last summer, focusing on Europe, mainly due to these actions. On long haul, however, airberlin's US seat capacity will grow by 57% this summer, with four new routes. On routes to Latin America, airberlin's growth of recent years has been halted by a more intense competitive landscape. Lufthansa's low cost subsidiary Eurowings has grown rapidly to destinations served by airberlin in Latin America.
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