Lufthansa Group CEO Carsten Spohr recently flew a seemingly unlikely airline: Qatar Airways. The Doha-based carrier epitomizes the German giant’s struggle against Gulf super-connectors. Emirates is larger, but Qatar Airways has arguably surpassed on product and decreased on financials. Qatar’s growth challenges Lufthansa’s capacity-discipline mindset, and Qatar has made blue-chip investments, including in Lufthansa rival IAG.
So how did Spohr find his flight? “We were in this, to be honest, good business class of Qatar Airways…the second best airline in the world after Lufthansa,” he said at a recent company presentation.
His flight to Addis Ababa on an Airbus narrowbody made for a timely comparison in light of Airbus launching the A321XLR and amassing 243 commitments for the long-range narrowbody.
Lufthansa Group has bought most Airbus aircraft variants, so there was considerable attention and surprise when Spohr called the A321XLR “niche” and thought its options in the group were few. He is guided by numbers but also personal experience, including his recent Qatar Airways flight.
“It just doesn’t feel right to be on a narrowbody for 4.5 hours. The noise, vibrations, the toilets – it’s just not a widebody experience,” he said.
While the new XLR pushes nine-hour narrowbody flying, there have long been narrowbody flights longer than the 4.5 hours that Lufthansa’s Spohr experienced on Qatar Airways. If widebody #PaxEx infers comfort and premium products, some would point to a variety of narrowbody aircraft matching a widebody experience.
Indeed, TAP co-owner David Neeleman made this very case in an an interview with Runway Girl Network, saying that when it comes to twin-aisle aircraft “way too much” attention is given to “the grandiose space in the cabin”.
“What’s most important,” he added, “is personal space and what you have going on in your personal space.”
For now, one major premium narrowbody market is transcontinental US flights, which have lie-flat business class seats. Most are not direct aisle access, but neither are some of Lufthansa’s current widebody business class seats. It might be argued that Lufthansa’s historically inferior product makes them more sensitive on this topic.
While perceived experience is debatable, Lufthansa’s numerical assessment is more firm. It already passed over the A321LR, a decision that Spohr said “was not much of an issue”. The LR would have enabled east coast US flights from Brussels, but not from the group’s main hub at Frankfurt.
The XLR’s longer range opens up more of the transatlantic, but Spohr identified Africa as the XLR’s opportunity in the group. “It might be a niche product, even for us, but it won’t be a game changer,” he said.
Transatlantic and other markets are good for cargo, whose revenue contribution is higher to Lufthansa than other European or North American airlines. Of the 243 XLR commitments, many are from airlines or groups without major cargo units, such as Flynas, Indigo Partners and JetBlue. They account for almost a third of the commitments so far.
About half of Lufthansa’s cargo is carried in the hold of passenger planes, contributing 10-15% of flight revenue.
“This aircraft is not a cargo provider,” Lufthansa Chief Commercial Officer – Network Airlines Harry Hohmeister said. “So why should I take a maybe 0.3% cost advantage against a 10-15% revenue disadvantage as Lufthansa?” He drew an important distinction that the group’s impression of the XLR may not be shared by peers. “Of course others might not have a cargo organization like we have.”
Boeing has to consider how much cargo capability to give its NMA, which the A321XLR is trying to preempt. North American airlines favor a passenger-focused NMA while Asian airlines want room for cargo.
Frankfurt is a logistics hub for Germany, the world’s third-largest exporting nation, where a third of goods by value leave the country by air.
“For cargo in aviation, Frankfurt is what London is for the passenger business,” Spohr said. “If you cannot make money here in cargo or in passengers in London, you better leave the industry.”
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