Lufthansa’s CEO Calls Cheap Low-Cost Carrier Fares ‘Irresponsible’
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Ultra-low-cost carriers have democratized air travel throughout the world. In Europe, it’s not uncommon to find one-way fares for as little as $11. While passengers enjoy these low fares, one airline executive isn’t too thrilled about airlines selling such cheap flights.
In a recent interview with the Swiss newspaper NZZ am Sonntag, Lufthansa’s CEO Carsten Spohr called out Europe’s ultra-low-cost carriers for offering such cheap fares.
Spohr told NZZ am Sonntag that the fares offered by low-cost carriers are “economically, ecologically and politically irresponsible” and that “flights for less than 10 euros shouldn’t exist.”
Though Sphor did not mention specific airlines by name, he claimed that Europe’s two largest low-cost carriers (Ryanair and EasyJet) are “losing a massive amount of money” as the airlines expand their operations in Germany, Lufthansa’s home market.
Meanwhile, Lufthansa’s own profit projects have been impacted as a result of increased competition from these low-cost carriers. Bloomberg is reporting that Lufthansa Group lowered the company’s 2019 profit forecast last month as a result of being forced into offering lower fares on flights throughout Europe.
Rather than cede some markets to low-cost carriers, Spohr told NZZ am Sonntag that Lufthansa will stand its ground, telling the newspaper that, “Nobody is going to push us out of our home markets.”
Lufthansa, the largest airline in Europe as measured by passengers carried, is a full-service airline. Rather than charge passengers for things like carry-on bags and advanced seat assignments, Lufthansa continues to bundle amenities into its economy class fares. Low-cost carriers like Ryanair, however, sell significantly cheaper tickets by charging passengers for nearly every aspect of service including carry-on bags.
However, in recent years, Lufthansa Group has caved to the market forces and increased competition. Lufthansa has introduced basic economy fares on select routes and aggressively expanded operations of the airline’s own low-cost carrier, Eurowings.
In the next six months, Ryanair £9.99 one-way fares are being offered on numerous routes throughout Europe. For example, one-way flights from Cologne to Berlin, Germany are £10 one-way this October while Lufthansa’s lowest fare is currently around £30 on Eurowings. Flights on Lufthansa start at over £177 one-way on that same route.
While Lufthansa’s CEO may find $11 fares irresponsible, Europe’s largest ultra-low-cost carrier, Ryanair, managed to post a profit of just under $1.3 billion USD.
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