ONE company, two brands: sounds almost Chinese.
The good thing about Lufthansa’s takeover of Swiss is that it’s been done before, specifically with KLM and Air France. Although this is a different scenario, in that Lufthansa will spend 310 million euros ($369 million) to rescue Swiss – which posted net losses of 90 million euros in 2004 (Lufthansa’s net profit was 404 million euros the same year and 2005 operating profit is estimated at 550 million euros) – the formula is similar: Swiss keeps its own identity within Lufthansa. The German company will incur a one-time charge of 101 million euros to integrate the Swiss airline but its chief financial officer Karl-Ludwig Kley has said that the takeover is expected to result in annual savings of around 165 million euros from 2008 onwards.
Doubtless, together they make a great team: the combined network serves 250 destinations in 117 countries. Swiss flew 9.65 million passengers in 2005, Lufthansa flew 51.3 million.
Beyond the number crunching, the carriers have brought operations together ‘under one roof’ at their three hubs: Frankfurt, Munich and Zurich and can now provide more destinations, denser frequencies and better connections worldwide, among other benefits, says
Lufthansa’s Uwe Wriedt, general manager UAE, director for the Gulf and Pakistan. “It is the marriage of two world renowned airlines with the highest quality and service standards and will produce clear benefits for our customers. It is beneficial for Switzerland and Germany, advantageous for our Star Alliance partners and strengthens Europe’s aviation sector.”
An expert team from both airlines examining all the existing routes as well as new potential destinations, he says, so specific changes here in the Middle East need to be determined.
For the moment, with even the IT systems being synergised, combined distribution channels, websites and frequent flyer programmes (as of April 1, Lufthansa’s Miles & More becomes Swiss’ new frequent flyer programme), dual network access to all travel agents, harmonised fares and homogenised training procedures mean that both airlines should be speaking the same language.
And the customers benefit. From the start of the winter schedules, both airlines’ check-in desks and departure gates at their three hubs of Zurich, Frankfurt and Munich are accommodated with the home carrier. And of course, says Wriedt, travel within the network will be seamless. “Besides the enhanced flexibility, we are currently working on marketing and pricing promotions tailored to the needs of the Gulf travellers such as our joint promotion in the UAE for leisure travellers with fares from Dh1,950.”
Meanwhile, Lufthansa is going ahead with planned new network enhancements – the airline’s summer programme adds additional flights to Shanghai, Hong Kong, Tehran and Hyderabad. Says Wriedt, “With the introduction of the 2006 summer timetable on March 26, Lufthansa is expanding its long-haul capacity. The biggest increase is on routes to Asia (two per cent), followed by the Middle East/Africa (1.2 per cent) and North America (0.4 per cent). Services on European routes will be increased by 4.6 per cent. This summer Lufthansa will also offer more intercontinental flights from its Munich hub.”