Airbus A330 Eurowings gets ready for take-off at Munich Airport

Lufthansa’s second approach at low-cost, long-haul will have new brand

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Lufthansa’s foray into low-cost, long-haul by using Eurowings was unpopular with passengers, unions and one important person: Lufthansa Group CEO Carsten Spohr. “I have to take the blame for that,” he said.

Yet this is not vindication for travelers espousing only premium, full-service airlines. Lufthansa is going to make a second attempt at having a lower cost German airline fly long-haul – unlike Air France, which ended Joon to exclusively focus on its mainline operation, or the collapse of independent long-haul LCCs Primera Air and Wow Air, or Norwegian’s restructuring.

Spohr still believes in the underlying strategy of multiple brands at different service and cost points. But he regrets the initial solution was Eurowings, which the group was primarily developing for short-haul flying. “When we introduced Eurowings long-haul, it was never meant to be an essential part of the Eurowings business model,” Spohr told an investor forum earlier this year.

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Eurowings was already stretched when it was tasked to absorb airberlin in a rare opportunity to secure slots and marketshare in the constrained German market. “Eurowings had to solve too many open issues of the Lufthansa Group,” Spohr reflected.

The group has taken long-haul – and a planned integration of Brussels Airlines – out of Eurowings to allow the latter to focus on restructuring short-haul. But it is also an opportunity to re-think how to run a second long-haul brand in the German market. Lufthansa’s “Jump” program allocated a handful of A340s to previously regional-only CityLine, but to passengers the brand and service was the same as Lufthansa.

“We have other options,” Sphor said, commenting on changes in Lufthansa pilot agreements since Eurowings was established as a LCC. “We can have an Edelweiss-type operation, as we have in Switzerland, also in Germany without needing Eurowings.”

Edelweiss, the quiet leisure arm wholly owned by Lufthansa’s Swiss, is a model for the next long-haul brand, which has the internal project name “Purple Moon”. But staff are nicknaming it “Edelwings,” Wirtschaftswoche said. Lufthansa told the newspaper it would announce the brand next year but did not provide details. The newspaper does not expect an “exotic” name as Air France did with Joon.

Referencing Edelweiss and Eurowings brings an array of possible passenger experiences. The two platforms are different. Edelweiss has greater headquarter efficiencies than Swiss, but to passengers, Edelweiss’ long-haul service is not much different from Swiss – or maybe better. On the soft side, some passengers reckon Edelweiss crew are friendlier since they often have longer layovers.

For hard product, Edelweiss’ ex-Swiss A340s were retrofitted with mood lighting and Panasonic’s eXLite IFE whereas some Swiss aircraft have an older product. On Edelweiss, IFE is free, as is food & beverages and checked luggage. Edelweiss took out Swiss’ first class and reduced the number of business class, but kept lie-flat seats. Eight-abreast economy was retained, but Edelweiss fit one more row in the last section of economy.

Eurowings long-haul was no Lufthansa. Baggage and meals were separate. For premium seating, initially there was only premium economy but then business class seats – the same as at Lufthansa, footsy games and all – were added. Punctuality was weak and made worse as Eurowings quickly grew by adding airberlin planes. Eurowings kept eight-abreast rather than have an AirAsia X-style nine-abreast. Yet some passengers preferred Eurowings over Edelweiss due to frequent flyer earning rates.

Spohr referenced IAG’s Level as part of the space Lufthansa’s lower-cost platform needs to be in. Product wise, Level is closer to Eurowings than Edelweiss. Yet Level is more integrated into its parent full-service brands, which brings benefits of connectivity, IT and sales distribution, which Lufthansa told investors it wants. Eurowings flights are achieving greater yields since being sold by Lufthansa, according to Wirtschaftswoche.

Eurowings was originally kept out of Lufthansa’s Frankfurt and Munich hubs the way Level was kept out of Madrid and London. Edelweiss flies from Swiss’ main base at Zurich, and now Eurowings flies long-haul from Frankfurt and Munich, an expansion it referenced as a “tourist-oriented long-haul program”. It shows the group is better capable of managing brands and hubs, a turnaround from Sphor’s first attempt at low-cost, long-haul.

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1 Comment

  1. Kasha Boxir

    The problem these airlines have with the subsidiaries is not marketing them clearly enough when passengers are making their reservations. That’s true for Rouge on AC, Level on Iberia, and Edelweiss with Swiss. I understanding wanting to have it all integrated, but as someone who does not want to fly on these lower quality services I really detest how they’re marketed when booking flights. Sometimes it feels like they’re trying to trick me into buying flights on these carriers.

    I can’t imagine how many unsuspecting passengers booked their flights out of Tampa to Zurich thinking they’re flying on Swiss, only to find out Edelweiss is the only operating carrier out of that airport and they have probably the worst website imaginable, and seats are incredibly confusing to assign! Or to think you’re booking yourself on Iberia, only to board a Level plane from Boston to Madrid, only to find out the only thing included for food is water, and if you want anything else you have to pay.

    These models work… sort of. But I think their marketing disillusions passengers from the brand due to the marketing strategies of trying to tie them into the main brand so hard. I know so many people who had a bad experience on AC Rouge, and now will never fly Air Canada because of the budget carrier experience they had.