Lufthansa is fighting hub congestion by offering an increasing number of direct city-to-city flights, both within Germany and to destinations in Europe, avoiding its hubs at Frankfurt and Munich. Flying 320 flights daily to European centres on routes for which traffic is too light for a 100-seat aircraft is the kind of operation which requires a specialised airline.
That is where Lufthansa's CityLine comes in. Based at Cologne, low-cost CityLine takes care of Lufthansa's operations "-on less-frequented routes within Europe which are not served by the smallest aircraft in the Lufthansa fleet". CityLine operates an all-jet fleet of 17 Aero International (Regional) Avro RJ85s and 29 Bombardier Canadair Regional Jets. The airline in 1996 carried over 3 million passengers, with an average load factor just over 50% and a DM6 million ($4 million) profit.
CityLine managing director Dr Karl-Friedrich Rausch says: "We are set for growth. We have new markets and higher yield in mind and have set our 1997 target at 3.7 million passengers. But we stick to routes where 100-seat Lufthansa aircraft would be too big. We also learned that customers prefer jets. So we phased out our last Fokker 50 last year and now have an all-jet fleet."
Much of the success stems from operating the CRJ, for which CityLine was launch customer in 1990. Rausch says: "The CRJ is economical. It allows us to tap new markets and serve destinations that cannot be served by larger aircraft. The aircraft offers sterling service on 'long thin routes' where turboprops are too slow and a Boeing 737 too big.
"Our break-even load factor is at 50%, but we think we can improve on that through growth into new markets and by addressing the high-yield business traveller niche. We have no plans for acquiring a third aircraft type, but we are interested in the new CRJ-X-That would fit nicely between our present CRJ and the bigger Avro regional jet. It has an underfloor baggage compartment that will allow us to solve the problem of passengers invariably walking on board with oversize cabin luggage," Rausch says.
Much of CityLine's success is based on being a low-cost airline. "Our pilots are paid 20% less than Lufthansa's. We hire them on the free market, but most come from the Lufthansa school in Phoenix, Arizona," Rausch says.
Source: Flight International