TOM GILL / LONDON
Deutsche BA (DBA), the German subsidiary of British Airways, is to cut flights to London and focus more closely on the domestic market in response to the threat from low-cost carriers.
Airline sources suggest the airline may also decide to cut its other international services - to Barcelona and Madrid - when it unveils its own version of BA's "future size and shape" review on 15 March, but the company declines to comment on other network changes.
Although, like low-cost operators, Munich-based DBA is a Boeing 737 operator, the high costs written into labour contracts would frustrate any attempt to compete in the low-cost market.
The move comes as Berlin-based Germania, fresh from a victorious price war with Lufthansa, is to step up its low-fares services. The privately owned airline, which flies four times daily from Berlin Tegel to Frankfurt Main, will launch single-class Berlin-Cologne services on 1 April, followed by Berlin-Munich in November, says joint managing director Mustafa Muscati. Germania plans to add Munich-Hamburg this winter, and eventually aims to offer international services. "Lufthansa has a monopoly and prices are very high. Iam very optimistic about the low-fare, no-frills market in Germany," says Mustafa.
Germania's foray into the budget market started in November when it launched a one-way Berlin-Frankfurt fare of €99 ($87), provoking Lufthansa to match the price. The German federal cartel office told the German flag carrier that it was setting prices below operating costs, given Lufthansa's full-service operation, and must raise its fares. Lufthansa is to appeal.
Ryanair, Europe's largest budget airline, is also ramping up services in Germany. Last month it established a base at Frankfurt Hahn and started flights to Bournemouth, Milan, Oslo and Pescara; this month it is adding Montpellier, Perpignan and Pisa. Mustafa says it is "unrealistic" to expect passengers to flock to Hahn - around 90km (56 miles) from Frankfurt - just because fares are low.
Source: Flight International
