Lufthansa realigns Eurowings as European low-cost arm

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Lufthansa is replacing EurowingsBombardier CRJ900 fleet with Airbus A320s as it builds up the regional subsidiary as a pan-European point-to-point airline.

Eurowings – a wholly owned division based in Dusseldorf – is currently operating its 23-strong CRJ-900 fleet on thinner routes in Germanwings’ network under a wet-lease agreement. But while the latter sister carrier serves European destinations from German airports outside Lufthansa’s Frankfurt and Munich hubs, Eurowings will be re-established as a point-to-point airline with bases in other countries, said Lufthansa Group chief executive Carsten Spohr during a media briefing today.

Basel will become Eurowings’ first international base in early 2015. Between two and four A320s will be stationed at the airport – which serves the border region between Switzerland, France and Germany – and replace all local flights by Swiss International Air Lines, says Spohr.

The group is considering the establishment of additional bases, although no decision has yet been made, says Spohr. The evaluation will initially focus on the home markets of Lufthansa’s subsidiaries – wholly owned Austrian Airlines and Swiss as well as part-owned Brussels Airlines – in Austria, Switzerland and Belgium, respectively.

Zurich and Geneva will continue to be served by Swiss, says Spohr.

Eurowings will replace its CRJ900 fleet with A320s for the relaunch in 2015. While 13 A320s will be transferred from Lufthansa’s mainline operations, the group needs to order an additional 10 of the type. That order still requires approval by the group’s supervisory board, says Spohr.

However, it appears that any potential international bases will require further aircraft. The A320s stationed in Basel will be additional to the 23-strong core fleet, says Lufthansa.

Spohr is confident that Eurowings will not only have “significantly lower costs” than Swiss, but also be able to compete with budget carriers such as EasyJet. Referring to the UK short-haul specialist – which has strong presences in Geneva and Basel – Spohr says that Lufthansa Group would not focus Eurowings on that market if it wasn’t able to withstand its competition.

Existing labour agreements will be honoured at Lufthansa and subsidiaries such as Germanwings, Austrian and Swiss. However, new international operations, such as Eurowings’ Basel base, will be established under new terms with staff from outside the group, says Spohr.

The realignment of Eurowings is part of plans for a “Wings family” of subsidiaries – which should also include a proposed new, yet unnamed long-haul division – focused on low-cost travel mainly for leisure passengers.

Paying tribute to EasyJet’s success, Spohr says that Lufthansa will adopt part of the UK carrier’s business concept to centrally manage its “Wings family” of low-cost subsidiaries.

The aim for the budget family is to move into third place, in passenger-number terms, for European point-to-point traffic, behind Ryanair and EasyJet, he says. Lufthansa Group is currently in second place after Ryanair in terms of total passenger numbers, but that includes the former’s long-haul travellers.