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Issue 1 | 2005 A MAGAZINE FOR AIRLINE EXECUTIVES 2005 Issue No. 1 T a k i n g y o u r a i r l i n e t o n e w h e i g h t s I N T H E B L AC K A conversation with … IN S I D E Lufthansa benefits from Joe Leonard, CEO 22 close-in re-fleeting and Chairman, Cathay’s cargo business 45 drives revenue AirTran Airways Frontier Airlines enlists 76 strategic partners page 59 © 2009 Sabre Inc. All rights reserved. [email protected] Photo courtesy of PrivatAir profile Business r i A t a v i r P Strictly f o y s e t Two of Europe’s prominent airlines have tapped into r u o c o t o a new revenue stream by offering business-class- h P only services on their long-haul flights between Europe and the United States. By Marco Contento | Ascend Contributor irlines have long focused on luring high-yielding business travelers, but two European- based carriers have taken the notion one step further. ALufthansa German Airlines and Swiss International Air Lines, looking to tap into the lucrative business travel between Europe and the United States, provide business-class- popular with business travelers, was not suf- only flights. ficiently profitable. Lufthansa decided to dis- For the two airlines, flying traditional continue the route, leaving a big business long-haul aircraft on certain routes between community without a connection between Europe and the United States did not achieve one of Germany’s economic powerhouses, strong enough financial results to justify contin- the “Ruhr-Gebiet,” and the United States. uing the service. Business demand was strong, Seeing that there was a specific niche mar- but not strong enough to fill the planes. ket, Lufthansa sought to fill the gap in a way Because the need for specific service between that would profitably satisfy the business the two countries still existed, the carriers inde- demand. pendently found a creative solution. In June 2002, Lufthansa, through the Lufthansa, which recently celebrated use of PrivatAir’s executive jets, resumed ser- 50 years of service, operates the business- vice between Dusseldorf and Newark. class-only flights 18 times a week between “The cooperation with PrivatAir allows r i A For carriers such as Lufthansa German two German and two U.S. markets, and us to accommodate customer demand for a t a v i r Airlines and Swiss International Air Lines, Swiss operates a similar service six times a nonstop connection from North Rhine- P f o operating traditional long-haul equipment week to the United States. Both airlines offer Westphalia to New York,” said Thierry y s e t r on specific routes between Europe and the services in partnership with PrivatAir, a Antinori, executive vice president of market- u o c the United States did not produce strong Swiss-based company specializing in ad hoc ing and sales for Lufthansa. “We are delight- o t o h enough financial results to continue the charters for the executive segment using all- ed to be able to serve the route economically P service. By partnering with PrivatAir, business-class aircraft. in cooperation with a partner airline.” both airlines have successfully continued For Lufthansa, the rationale behind the Through a wet lease agreement, serving the routes using business- introduction of the executive jet service was PrivatAir provides the aircraft, either special class-only jets with top in-flight service. simple. Constantly monitoring its routes, in Boeing 737s or Airbus A320s, and crew, and October 2001, the airline realized its Lufthansa controls the onboard product. Both Dusseldorf-Newark route, although highly aircraft types are licensed to fly trans-Atlantic ascend 53 profile and are specially equipped with auxiliary fuel a s n tanks. They have a maximum of 48 business- a h t f u class seats; the schedules of the special L f o flights are integrated into Lufthansa’s regular y s e t network as well as optimized to connect to r u o c Star Alliance partner United Airlines’ hub oper- o t o ation at Chicago O’Hare International Airport. h P Unlike a conventional executive jet that would have to be chartered, Lufthansa sells seats at regular business-class rates. Business-class passengers do not have to pay a premium when using the executive jet for the trans-Atlantic portion of the trip. The most interesting aspect of these flights, however, is not so much the way they are being operated but the impact they have had on Lufthansa and its customers’ behavior. Lufthansa officials said customers have responded very positively to the new product. Over and above the sheer convenience of hav- ing nonstop service across the Atlantic, a remarkable number of passengers seem to appreciate the swift check-in procedures as well as the private and exclusive ambiance aboard the small jets. Lufthansa’s customers value its trans- “Fast check-in and check-out proce- We have passengers who Atlantic business-class-only jet service dures, plus having a maximum of 48 passen- for the convenience of nonstop flights gers for a crew of four, also add to the exclu- “ tell us that they drove on long routes as well as the rapid sive experience,” said Katrin Haase, manager check-in procedures and atmosphere of of media relations for Lufthansa. up to Dusseldorf just to the private, exclusive smaller jets. Lufthansa said acceptance of the prod- uct exceeded expectations, and passenger be able to fly on our feedback indicates that customers intentional- ly select executive jet flights. executive jet. And with convenience in business travel. “We have passengers who tell us that Following the initial success on the the schedules being Dusseldorf-Newark route, Lufthansa began service between Dusseldorf and Chicago, s Illinois, as well as Munich, Germany, and e On its nonstop, business-class-only efficiently synchronized, n i L Newark using PrivatAir executive jets. And r i route between Zurich and Newark, A l further expansion between Germany and a also transiting passengers n Swiss International Air Lines replaced o i t other markets are not ruled out. a a three-class-configuration Airbus A330 n r e t from different markets While it’s an ideal solution to obtaining n with a Boeing 737 business jet, bringing I s additional business customers, as with any s i the number of seats from 196 across w S business venture, there are bound to be f three cabins to 56 business-class seats. appreciate the product. o y challenges. s e t r For Lufthansa, the biggest challenge is u — Katrin Haase, manager of o ” c o maintaining the same high level of stan- t o media relations for Lufthansa h dards that it maintains on its own flights to P ensure customer expectations are met. “Lufthansa has a very strict quality con- they drove up to Dusseldorf just to be able to trol system to monitor customer feedback,” fly on our executive jet,” said Haase. “And said Haase. “In addition, LSG Sky Chefs, a with the schedules being efficiently synchro- fully owned subsidiary of Lufthansa Group and nized, also transiting passengers from differ- the world’s largest caterer, delivers the very ent markets appreciate the product.” same products as on the mainline flights.” The feedback gives a clear indication Swiss International Air Lines also takes that Lufthansa has successfully targeted and, advantage of its partnership with PrivatAir to most importantly, won clientele looking for provide business-class-only service between 54 ascend profile Europe and the United States. The flights are Manhattan [New York], both easily accessible While Swiss and Lufthansa have experi- operated under a similar wet lease agreement, from Newark,” said Dominik Werner, media enced success with their business-class-only and Swiss, likewise, takes on all operational relations officer for Swiss. “And while Swiss jet service, these services aren’t likely to responsibilities. International targets business communities expand into slot-constraint airports where air- However, unlike Lufthansa, where the not only in the Zurich and Basel area, but also lines are already struggling with capacity. executive jet services were added, Swiss the southern parts of Germany as well as But with customers demanding more replaced an existing three-class-configuration Northern Italy, passengers flying in economy flexible schedules, the market for executive jet Airbus A330 rotation with a Boeing 737 busi- on Swiss International still have the choice services operated by traditional carriers is cer- ness jet — a decrease in available seats from between daily Zurich and Geneva tainly there, and there may well be an increase 196 across three classes down to just 56 busi- [Switzerland] flights into New York’s John F. of this type of service in coming years. a ness-class seats. This reflects the former com- Kennedy International Airport.” bined business- and first-class capacity on the Swiss also emphasizes the focus on route between Zurich, Switzerland, and maintaining a high and consistent level of ser- Newark. vice for its business-class-only flights. The airline’s focus when introducing the “The PrivatAir crew is only deployed Newark flights was to offer an attractive and onto the Zurich-Newark rotations to ensure competitive business-class product. they are familiar with our product as well as Marco Contento is a Europe-based account “This flight is ideal for Basel’s chemical the expectations we have,” Werner said. director for Sabre Airline Solutions. industry as well as Zurich’s banking sector, “Initial customer feedback is very positive, and He can be contacted at which have their U.S.
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