Lufthansa from September 2023

[PopUp]

Honestly, I cannot follow anymore. How many different brands does LH or LH Group have apart from LH, LX, OS, SN ?
What is the difference, for instance, between Eurowings and Discover (or is it Discover Air) ?
(creating new airlines or new brands to be able to offer/impose lower wages and working conditions?).
What are the IATA two letter code of these airlines ?
Will it be possible to earn (status) miles and spend miles on flights operated by these new airlines ?
On all Star Alliance airlines frequent flyer or loyalty programs ?
Which airline will get priority when it comes to organise/increase fleets ? For instance, priority to Discover or SN ?

[RoMax]

What is the difference, for instance, between Eurowings and Discover (or is it Discover Air) ?

Discover Airlines (4Y) had never much to do with Eurowings (EW) aside from the name and brand. Long haul under Eurowings (under EW management) was not working well and so LH decided to close that part of the EW business in 2019. But there was still room for a more leisure-oriented ('Condor-competing') airline in Germany. So Discover was launched, initially much as a sort of spin-off from LH in FRA (rather than a spin-off from EW unlike the Eurowings Discover name suggested!). The decision to call it Eurowings Discover was in the end more a cheap way to launch the airline in 2021 still in Covid times with a simple brand copy-paste (i.e. starting up at lower cost not having to focus on those things).

As the association to the 'low-cost' Eurowings brand was not helping Discover (which remains leisure focussed but is not a real low-cost, neither only operating low-cost markets at all - several of those leisure markets are relatively high yield) it was found necessary to really get rid of the Eurowings name and branding for Discover. Which, again, was never managed as a subsidiary of EW except for the pure branding.

Long story short, if you're in favour or against this multi-brand strategy in Germany, at least this latest rebranding announced yesterday made it clearer as Discover has nothing to do with Eurowings.

Both Eurowings and Discover are also Miles & More members and Discover has a close alignment with the United and Air Canada FF programs.

[oldblueeyes]

The history is more complex and you have to look back many decades.

Lufthansa had a leisure oriented brand - Condor. It was sold 20 years ago but it remained tied a little bit to LH as LH was offering feeder flights. As long as Condor was belonging to a travel group, there was no real competition.
Things have changed once Th Cook went bankrupt and Condor became a stand alone company - just before COVID LOT was close to acquire it. Owned today by a a venture capital company, it is pretty clear that one day a competitor will buy Condor and challenge LH in its main hub.
Looking form this angle, it makes sense to have an offering in the same space - thin long haul routes and leisure destinations.

The second aspect is the consolidation of various other ventures within the LH group:
- the P2P long haul started as Eurowings - it was not successful to go the Norwegian way, thus the new model is hub focused, only (FRA and medium term MUC as well)
- the mainline has some thin routes, where yield was not matching cost - this was the so called JUMP project, wich a handfull of A343 operated by LH Cityline in the past
- several offerings on short haul leisure destinations were served in the past by Sun Express Germany - a JV with Sun Express from Turkey ; this JV is terminated, but the market didn't disappeared and it is logical that it should be served


The name Eurowings Discover was an intermediate solution as the company started in the times of financial aid from the state and one condition imposed was not to invest into a new brand. Now the aid is paid back, operationally the entity is in black figures so no reason not to do a proper branding.

And this is not new to the group, Swiss has a very successful similar model with Edelweiss, with a product oriented more towards the needs of the self paying leisure traveller - no first class, premium economy is in fact a "more legroom" economy etc.

Last but not least, it is a business decision - Lufthansa has various agreements with the core personnel at their hubs and the decision for some market segments is either not to serve them as it can't be done economically or there are other capacity contrains (eg German speaking personnel) or having another brand with more open clauses whilst not cancelling existing agreements.

[PopUp]

Thank you, RoMax and oldblueeyes ! (I was aware of the existence of Edelweiss). Do Edelweiss and Discover have a Business class section ? If they do, what type of comfort do they offer ? Thanks!

[sn26567]

I still see a major difference between the Lufthansa and Swiss subsidiaries: Swiss has only one leisure-oriented subsidiary, Edelweiss, which is flying both long-haul and short/medium-haul, whereas Lufthansa is multiplying brands: If Discover was initially meant to cover long-haul, it has also short/medium-haul destinations that are in some way competing with Eurowings. This remains confusing, to say the least.

[oldblueeyes]

Yes, both Discover and Edelweiss have a business class, the product is somehow similar to SN.

With the new Allegris cabins for Swiss and LH there will be a clear differentiation here, as the main brands will be upgraded.

Having several rumors allocating the used A350 LH has recently acquired to Edekweiss, there might here some surprise as well - unless they would fly for a while the ex Latam cabin.

With respect to the positioning, there is no confusion between the brands:

Eurowings - flies out of bases located outside the hubs (former LH decentral routes) both city pairs (ex LH business) and leisure (ex Germanwings routes) on short haul only

Discover flies out of the hubs leisure and thin long haul and leisure (ex Sun Express Germany business)

The unclear positioning is coming from the past as Eurowings had today's positioning, than the stopped de central long haul and on top Eurowings Discover from the hubs and let's put it straight, it served over more than a decade to dump unprofitable LH business from de central routes, experiments, acquired regional routes (the Q400 operation of LGW which came in package with the Air Berlin legacy) etc.

[PopUp]

(comments written from another time zone).
My apologies, but reading all this, I can only come to this conclusion : it's a mess.
I know I am repeating myself, I am not an expert, but imho LH made a mistake by discarding the A321(X)LR option, for itself and for others. But psychologically, can you have dwarfs when you bring in again the giants ?
The A380s that were suppose to be a thing of the past according to LH management, are back (and if I am not mistaken) they will all be back.

[oldblueeyes]

Yes, according to the announcements all 8 remaining 380 shall be back.

The fair question is to what extend the mess is driven by LH's decision and to what extend by supply issues of the manufacturers.

- the 779 is the elephant in the room, with a target launch date in 2020 and optimistic outlook for 2025 (but who knows?)
- there is a peak of targeted deliveries in 2023 : 9xA359 and 15xB789 - here the situation is mixed , A359 deliveries for 2 years were postponed during Covid times, now the majority of the frames are built but there is lack of cabin seats; new 789 deliveries should have been already started but there is Boeing not being able to keep the pace
- 351 are targeted for 2026 deliveries - initial logic was to order 10, let's see how things evolve if all 380 would be retired soon or if they would stay longer

Overall speaking - there were 3 years with LH reducing investments to the level of amortization ( from 3,5 to 2,5 bn) - but if you ask for taxpayers loan to survive you are in a different situation as state owned airlines are.

LH's misscalculation was the increased demand for premium seats post covid, leaving them without First in Munich, thus the reactivation of all A346 until the new 351 would arrive.

But basically there is no change in strategy, as of today:
- 789 are replacing the 343 in FRA and it looks like they would replace some 333 as well
- 351 goes to Munich
- Austrian is getting the 5 789 sprinters, first, the rest is not decided
- 779 is replacing in FRA the remaining (and retired) 744 and 346
- 359 is replacing 343 at Swiss

[RoMax]

I still see a major difference between the Lufthansa and Swiss subsidiaries: Swiss has only one leisure-oriented subsidiary, Edelweiss, which is flying both long-haul and short/medium-haul, whereas Lufthansa is multiplying brands: If Discover was initially meant to cover long-haul, it has also short/medium-haul destinations that are in some way competing with Eurowings. This remains confusing, to say the least.

The situation is very different between LH in Germany and LX in Switserland.

Switserland remains such particular very high yield market they manage to keep the LCC's largely out. Edelweiss is a leisure subsidiary but in no means a LCC or low-yield carrier.

In Germany there is a need to cover the 3 domains: the big legacy network of Lufthansa with FRA/MUC hub focus, the LCC dominated de-central network served by EW and the higher yield leisure market (both short- and long-haul) served by Discover (currently with focus on FRA as also Discover benefits from the feed network of LH).

Contrary to EW, both Edelweiss to Swiss and Discover to Lufthansa are much much closer in product (e.g. Discover flies the same 'hardware' as LH, just in a less Business-heavy configuration) and type of business. LX and LH management both influence to a very high extent what happens at Edelweiss and Discover - that's to a less extent to case with EW (as it should be if they want it to effectively be a LCC).

[RoMax]

The history is more complex and you have to look back many decades.

Lufthansa had a leisure oriented brand - Condor. It was sold 20 years ago but it remained tied a little bit to LH as LH was offering feeder flights. As long as Condor was belonging to a travel group, there was no real competition.
Things have changed once Th Cook went bankrupt and Condor became a stand alone company - just before COVID LOT was close to acquire it. Owned today by a a venture capital company, it is pretty clear that one day a competitor will buy Condor and challenge LH in its main hub.
Looking form this angle, it makes sense to have an offering in the same space - thin long haul routes and leisure destinations.

I wouldn't make it so complex. It's in fact all very simple and logic. It's just with all background details it looks complex

Sure Condor when still under Thomas Cook ownership was much less of a concern for LH (not even near to be a priority), it would eventually have come on their radar anyway. There is a big high-yield leisure market to be served out of Germany, LH would anyway have had their limits in having that being served by a 3rd party despite their close allies at the time.
The failed EW long haul network speeded things up as they had a number of 'spare' aircraft that were wasting their time in e.g. DUS with EW.

And as said the EW Discover brand was just a cheap way to launch things, except for the pure brand 4Y and EW never had anything to do with each other: LH deciding the product, defining the network, the sales, the systems, the OPS, ... as it was right in the middle of their playing field in FRA and EW proved highly uncapable of making long haul a success away from the strong FRA/MUC hubs (and without the legacy systems, feeding, ...).

LH did a few attempts to make their operations cheaper for those leisure type of long haul routes (which are high-yield enough to be more than worth it, but not as much as their 'premium' network). Like e.g. those LH Cityline A343 ops. But in the end it all comes down to the same: with Condor being a complete independent company and Germany having too much of that high-yield leisure potential to just 'drop', they needed to find a suitable competitor. They tried a few things, but at some point stars well aligned for Discover to be 'a thing' that could actually work well.

It's maybe for others difficult to understand that 3 brand strategy in Germany from elsewhere (so did I initially frowned upon another brand), but actually it makes a lot of sense for them: all 3 airlines have their market, their type of customer, ... and they cooperate (or not) where it makes sense to achieve the most optimal group mix. The only issue (until this week) was that the Discover operation was associated with the Eurowings brand.

[sn26567]

It's maybe for others difficult to understand that 3 brand strategy in Germany from elsewhere (so did I initially frown upon another brand), but actually it makes a lot of sense for them: all 3 airlines have their market, their type of customer, ... and they cooperate (or not) where it makes sense to achieve the most optimal group mix. The only issue (until this week) was that the Discover operation was associated with the Eurowings brand.

For me, the three-brand strategy remains difficult to understand, when Brussels Airlines, part of the very same Lufthansa Group, does all this with a single brand. This enables SN to use the same aircraft in the winter for business travellers and in the summer for holidaymakers.

[Lux_avi]

For me, the three-brand strategy remains difficult to understand, when Brussels Airlines, part of the very same Lufthansa Group, does all this with a single brand. This enables SN to use the same aircraft in the winter for business travellers and in the summer for holidaymakers.

Lufthansa has plenty of routes to sun destinations. With its own metal.
What's your point here?

[sn26567]

For me, the three-brand strategy remains difficult to understand, when Brussels Airlines, part of the very same Lufthansa Group, does all this with a single brand. This enables SN to use the same aircraft in the winter for business travellers and in the summer for holidaymakers.

Lufthansa has plenty of routes to sun destinations. With its own metal.
What's your point here?

The point is: "Why does Lufthansa feel the need to operate under three different brands (or even 4 with CityLine), each one with its own AOC, when SN is happy with one single brand and AOC?"

[Lux_avi]

The point is: "Why does Lufthansa feel the need to operate under three different brands (or even 4 with CityLine), each one with its own AOC, when SN is happy with one single brand and AOC?"

Wouldn't SN do the same if it had the same size as Lufthansa? I bet they would.
But, with 40 AC in your fleet, it doesn't make much sense to create several brands & AOC's.

[oldblueeyes]

For me, the three-brand strategy remains difficult to understand, when Brussels Airlines, part of the very same Lufthansa Group, does all this with a single brand. This enables SN to use the same aircraft in the winter for business travellers and in the summer for holidaymakers.

Lufthansa has plenty of routes to sun destinations. With its own metal.
What's your point here?

The point is: "Why does Lufthansa feel the need to operate under three different brands (or even 4 with CityLine), each one with its own AOC, when SN is happy with one single brand and AOC?"

I suppose your answer would be totally opposite if the question why would non central hubs such as BRU need to operate an own brand? Let's think again about Eurowings.

Any option goes both ways.