is finally starting the process of transferring more non-hub flights to its lower-cost subsidiary . All European services from Stuttgart, Cologne/Bonn and Hannover are being taken over by the carrier, Lufthansa said Wednesday.
The move has been demanded by analysts and proposed by consultants for years, but Lufthansa so far refused to follow, believing it should try to turn around the unprofitable European operation on its own. The solution now is, in typical Lufthansa style, only a first step that still leaves most of the European network, particularly all hub flights, with the parent, while parts of the least important stations are being moved over to Germanwings.
Lufthansa itself will keep all of the European flights in Duesseldorf, Hamburg, Berlin, Frankfurt and Munich. Only recently, it announced a 40% capacity expansion in Berlin with almost 50 new destinations (although with often low-frequency service) to be added next summer. Carsten Spohr, head of Lufthansa’s passenger airline, said the Berlin model, which includes significantly lower fares, will be rolled out over time in other markets as well.
That strategy is a serious threat to growth perspectives of already unprofitable Germanwings, an airline that is among the hardest hit by the introduction of Germany’s air passenger tax at the beginning of 2011. Germanwings actually has to cut about one-third of its Berlin operation as a result of Lufthansa’s expansion in the city. But now it is given other markets and will move from a low-cost concept to a Lufthansa replacement in markets that the parent can no longer serve profitably on its own.
In addition to the European markets, Germanwings is also taking over more of the domestic flying from Stuttgart, including Bremen as a new destination. Stuttgart is Germanwings’ second-largest base behind Cologne/Bonn.
Lufthansa’s head of direct services, Oliver Wagner, also was named an additional member of Germanwings’ management board.