Wednesday, May 18, 2016
Dubai: Lufthansa Group will hold back its hub airlines from increasing capacity into the oil-rich Arab Gulf states for at least the next 12 months over concerns there is a glut of seats in the region.
Instead, its hub airlines will focus on adding flights to Iran and low-cost unit, Eurowings, will consider new services to the region after launching Dubai-Cologne flights last year.
“What we clearly see right now is a clear sign of overcapacity in the region,” Tamur Goudarzi Pour, Lufthansa’s Vice-President for the Middle East, told reporters at a briefing in Dubai on Wednesday.
Lufthansa Group has reined in its Gulf operations over the past 12 months, cancelling services to Abu Dhabi and Dubai, while increasing routes to Iran following the January lifting of sanctions.
Lufthansa’s Abu Dhabi-Frankfurt and Australian Airlines’ Vienna-Dubai routes were cancelled last summer, while both airlines have since added services to Iran.
“For the next 12 months [in the Arab Gulf] it will stay as it is with the direct link to Frankfurt, with the direct link to Zurich and connections with Eurowings to Cologne,” said Harry Hohmeister, Lufthansa Group executive board member and hub management chief.
Swiss International Air Lines operates the Group’s flights from Zurich to Dubai and Muscat.
Lufthansa, Europe’s largest airline when including its subsidiaries, has long complained about the rapid rise and state support for the government-owned Middle East carriers Emirates Etihad Airways and Qatar Airways, which it also blames for the surplus of seats.
“When you see the result development of some of the carriers in the region they are getting under pressure and the point is really over capacity,” Hohmeister said.
Emirates, the world’s largest international airline, made a record Dh7.1 billion in the fiscal year to March 31, but reported a decline in revenue that it said was due to currency pressures. Still, airline President Tim Clark has warned that yields are under pressure and the carrier is now considering introducing premium economy.
As Lufthansa waits for a capacity balance in the Arab Gulf, it will “would grow in Iran,” said Karsten Zang, its regional director for Iran and the Arab Gulf.
There is also the possibility of more Eurowings flights to the region, the executives said, with the low-cost unit starting twice-weekly chartered services to Salalah in Muscat this winter.
“Whenever there is an opportunity, whenever there is a market, they can jump in,” Zang said.
By Alexander Cornwell Staff Reporter
Gulf News 2016. All rights reserved.
