Lufthansa competitors made no bids for Brussels slots

[sn26567]

Deutsche Lufthansa’s competitors made no attempt to take over routes the carrier ceded in return for European Union antitrust approval to buy part of Brussels Airlines, EU regulators said.

The German carrier agreed in 2009 to a new slot-allocation system that would allow new entrants to operate flights on four routes including Brussels to Frankfurt and Brussels to Zurich. Lufthansa, Europe’s second-biggest airline, bought stakes in smaller competitors to expand networks and cut costs.

“No prospective new entrants have so far applied to receive the slots made available,” EU Competition Commissioner Joaquin Almunia said in a written response to an EU lawmaker’s question last week.

The European Commission “does not perceive the need to take additional measures,” Almunia said. Travel agents or others concerned by Lufthansa’s control of routes into Brussels could file a complaint with EU or national regulators “if there are serious concerns about a breach of competition law.”

Source: Bloomberg

[liege-bierset]

What does it mean for BRU and SN ? Good or neutral?

[fretn]

Higher prices for the customer, as there's less to no competition

[Stij]

Indeed!

No competition on two business routes, I guess that's a "yiiihaa" for Lufthansa and a big "D'oh" (as Homer Simpson) for all the customers!

D'oh!

Stij

[Charlie Roy]

It's a shame that Easyjet won't try BRU - ZRH

[redeye]

Indeed!

No competition on two business routes, I guess that's a "yiiihaa" for Lufthansa and a big "D'oh" (as Homer Simpson) for all the customers!

D'oh!

Stij

"D'oh" is a light expression. I would call it an uppercut for all customers, a real scandal even... I just wanted to book a BRU-ZRH return and knowing that this is an expensive route, I planned 6 months ahead for a November 30 trip with a December 1 return. Guess what? The website says "Please wait a moment. Price and availability are being gathered..." Are they joking with us or what? No matter what flight you take, the price with SN or SR is € 930. It is much cheaper to book a BRU-GVA via ZRH return (where I will not use the ZRH-GVA-BRU leg) plus a ZRH-BRU return (where I will not use the BRU-ZRH leg) than a BRU-ZRH-BRU. Who will put an end to this LH malpractice?

[sn26567]

BRU-ZRH is the typical example of the business route. Even with competition of an LCC, LX and its codeshare partner SN will make heavy profits in that route.

If my memory serves me well, easyJet tried to fly that route, but without the business passengers, that tentative was doomed. Helvetic also tried, with the same result.

[Air Key West]

I think BA and AF-KL have cheaper fares between BRU and ZRH than LX/SN, but you have to go through their respective hubs. But you could save something like 500 euros, which is worthwile the detour, I think, unless you're really in a hurry. Anyway, I agree : some airfares are outrageous.

[Stij]

"D'oh" is a light expression.

I know, other expressions came to my mind as well, but I was trying to remain... polite...

Cheers,

Stij

[tolipanebas]

Well, so much for all the ranting from competitors about the merger then!

If nobody took up the challenge to compete with SN/LH on any of those premium slots offered to them for free, then it mustn't be that compelling to do so after all and so the price rising effects and stellar profitability the SN/LH alliance allegedly has on all those routes by definition isn't nearly as big as some may think either, or the offer would have been compelling to take after all.

Rather than bitch about too high prices on BRU-ZRH, it may be worth considering that maybe just maybe prices on BRU-GVA are simply too low to be viable for network carriers like SN or U2, offering multiple flights a day each on this kind of secondary sectors, especially in a high fuel price environment like we have today. After all, U2 isn't booking any profits (quite on the contrary even) and SN isn't exactly turning a profit on their EU network either, so clearly they are both having difficulties getting sufficient revenues from EU pax to cover their costs: competition on EU routes is all very nice, but if in the end nobody makes money from it, then it is simply not sustainable and I think many airlines have understood that this is the case now indeed.

Let's put it bluntly: there are ZERO network airlines in Europe turning a profit on their European network at present, not even Lufthansa which is about the most profitable airline in Europe! Now, what does that say about average ticket prices on European flights, you think?

Remember the market has changed radically over the last couple of years due to the soaring fuel prices and it's not a fuel surcharge of a couple of euro per ticket that is going to offset it. Structural changes to the way airlines operate are needed and one of them is that we will see them compete less head on than they did before, but rather retreat back onto their own traditional route network and simply share the EU wide market amongst them, thus being able to command better yields throughout and yes, that will mean significantly higher ticket prices, prices which we already see being implemented first on those routes where competition has already disappeared.

[earthman]

Or the profits on the route are so high that SN/LH could afford to bribe competitors to not bid for the slots......

[euroflyer]

well, the only possible competitors would be LCC. AF/KL oder BA/IB would never go into direct competition with the LH group on such a route. Because they know the next logical step would be LH to do the same on one of their very profitable routes. Of course such routes like FRA-BRU or BRU-ZRH and so on must be highly profitable, but network carriers probably need them in order to offset losses on less profitable routes which they offer for connecting pax as well sometimes. And they know most business travelers (also those flying in eco) will not go from BRU to ZRH via CDG or LHR just to save the company 400 Euro when it means half a working day is lost, they might even miss a connection and so on ... ...

[EBKT]

BRU-FRA double way doesn't need to cost so much. I just checked it out on the website of Brussels Airlines just with a random date and it was about 130€. One way is (of course) always extremely expensive and costs you about 5à600€. Does someone know why a one way ticket is costing you always a fortune? Cheaper to buy a return ticket and to fly one way then...

[earthman]

Does someone know why a one way ticket is costing you always a fortune? Cheaper to buy a return ticket and to fly one way then...

The short answer is: because airlines think they can get away with it. Longer answer: one-way tickets are only sold at full fare, return tickets are sold at a discount with various restrictions (stay a saturday night, full moon, Saturn in Aries, etc).

Which is why most people would do just that, buy a return ticket and not use the return.

I wonder if it would be possible to pick two return flights, one A-B-A and one B-A-B, such that their total price is less than a single return ticket A-B-A with the same dates/flights as the first legs?

Or would it be possible to buy a ticket A-B-A with a transfer at some place C, but leave at C on the outbound trip, travel to B in a different manner, then take the B-A flight? (This might be possible on flights to the USA, since there you have to take your luggage through customs yourself at the first stop, you might as well just leave the airport at that point.)

Most importantly, isn't there some ticket search engine which can take into account such odd scenarios?

[Shanti]

The germans are back!