Lufthansa Chief Executive, Karsten Spor, made some controversial comments today about the cheap rates imposed by some of the biggest competitors at the ultra-low carrier prices.
Lufthansa's problems with cheap rates
Spor said airlines selling less than 10 euros ($ 11) are "economically, environmentally and politically irresponsible." He said that "flights of less than 10 euros should not exist".
Not surprisingly, Sphhr has a motivation for what he says – Ryanair and EasyJet are growing significantly in Germany and hence selling a lot of cheap tickets. Spor says "no one will push us out of our markets" and "the price war leaves its trail with us."
He also states that Ryanair and EasyJet "lose a huge amount of money" as they try to increase their market share in Germany. The impact of this has felt so much that it has led Lufthansa to reduce its profit forecast.
Quite conveniently, all this comes as a restructuring of Lufthansa's low-cost Eurowings, and I guess it's not related to EasyJet and Ryanair.
My comment on Spor
Spohr's comments are both outrageous and self-confident, and I think one of the most reckless ways to see Lufthansa attack their competitors at low cost (and they have tried many methods).
Is the sale of cheap prices economically, ecologically and politically irresponsible?
Maybe we are looking at various annual reports, but both EasyJet and Ryanair are extremely profitable. They just have a different way of selling tickets from Lufthansa, and that should be perfectly good.
Most people do not actually pay 10 leva per flight – they can pay for trips to places, bags, beer, lottery cards, etc. And the business model works for them.
If his proposal is that airlines are not earning money as they increase their market share in Germany, is not the case with many airlines? Typically, routes are not profitable from the first day for airlines – it takes time to increase market share, and this is something Lufthansa should know well here.
For me this is the most interesting moment. It can not be denied that travel has become much more accessible globally thanks to ultra-low-cost carriers and nowadays there is much debate about whether this is a good thing or not.
When governments are increasingly trying to reduce airline emissions, and with KLM even encouraging people not to fly, time is different than in the past.
But Lufthansa seems to take the position here that the right way to reduce emissions is to eliminate cheap ways to fly? This is convenient. Where is their campaign that encourages business class passengers to spend at an electronic meeting instead of flying to face-to-face?
Ironically, Ryanair has a significantly lower fuel consumption than Lufthansa (they only operate 737, which are under the age of eight years, while Lufthansa operates all types of aircraft, many of which have a higher seat price) passenger emissions are lower.
I'm not 100% sure of what Spor spoke. I guess he understands that EasyJet and Ryanair have some creative ways to create their business to cut costs. If this is the case, there are many airlines where it is, and it is clear that he only sets them apart after they have grown up in Germany.
In my opinion Spohr is off with his comments. For so long, Lufthansa has taken Germany for granted, and now EasyJet and Ryanair finally give them some competition on short-haul flights.
There is nothing economic irresponsible about this, because airlines that sell cheap flights are profitable.
Regarding environmental responsibility, there is no doubt that we are seeing a trend towards emission reductions, but I do not think cheap tickets are a problem. A person who pays 10 euros to fly with Ryanair has just as much the right to fly as someone who pays 60 euros to fly with Lufthansa, in my opinion.
What do you do with Spohr's comments? Is it irresponsible for airlines to sell super cheap tickets?
(Hat Board at Niko_jas)