Lufthansa CEO Christoph Franz said the airline would only enter into a partnership with a Gulf carrier from a position of strength (Reuters, 02-Nov-2012). Mr Franz said, “Air France and Air Berlin have entered these partnerships from a position of weakness…. We do not want to do this, we are not under pressure, and we can and we will assess any potential partnerships very carefully”. Mr Franz said “If we are to hold talks at all, then we need to be on equal terms with the negotiating partner. And to achieve that we need to first get our house in order”.
Lufthansa would only enter into Gulf partnership from position of strength: CEO
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Brexit follow-up Part 3: Gulf airlines, Turkish lose UK ally in M/E talks as protectionism spreads
The Brexit referendum produced a vote for the United Kingdom to leave the EU, although this process has not yet been formally invoked. In the scope of aviation, one outcome is the potential loss of the UK in shaping air service agreement negotiations. The UK has been a liberalising voice, one that often counterbalanced more protectionist views from France and Germany. The UK is often able to galvanise the smaller EU states too.
The EU now has mandates to negotiate open skies with states, including the UAE, Qatar, Turkey and the ASEAN bloc. The UAE and Qatar, home to the three Gulf network airlines, are expected to produce the most contentious negotiations. France and Germany will surely takes cues from Air France and Lufthansa to impede Gulf growth. In this light there are questions about whether the talks are genuinely motivated, or merely designed to draw out the discussion and thereby not produce any additional traffic rights while under negotiation.
What Air France and Lufthansa need is a real, lasting solution, rather than persevering Canute-like with stonewalling. Although a partnership seems logical, they may have waited too long. The Gulf airlines have found that they can succeed on their own.
Eurowings: new Munich routes outsourced to airberlin. Frankfurt hub may be next for Lufthansa's LCC
When Lufthansa began to transfer point-to-point short haul routes to its LCC Germanwings in 2013 it specifically excluded routes to/from its two main hubs at Munich and Frankfurt. Although its two main hubs have been less penetrated by LCCs than many other major European airports, this is changing. Moreover, competitor LCCs are growing rapidly across Germany and in other Lufthansa Group home markets. Even Air France-KLM established a Munich base for its LCC Transavia in summer 2016 (but this is under review). More ominously, Ryanair is to enter Frankfurt in summer 2017.
Lufthansa first revealed in summer 2016 that it was considering opening a Munich base for its LCC operations, now grouped under the Eurowings brand. On 21-Dec-2016 it announced plans to base four A320 family aircraft at Munich for 32 Eurowings routes from summer 2017.
Perhaps it was always inevitable that Eurowings would eventually extend to selected routes from Frankfurt and Munich, but agreements with pilots were understood to have limited the group's flexibility. Confirmation that the operation of Eurowings routes at Munich will be outsourced to airberlin under wet lease appears to have loosened this restriction. Eurowings routes from Frankfurt are also being considered.