TRAVEL WEEKLY BUSINESS
MONARCH GROUP INVESTS $3.1 BILLION IN 30 BOEING 737 SHORT-HAUL AIRCRAFT
LUFTHANSA UNVEILS PLAN FOR LOW-COST LONG-HAUL BRAND
Lufthansa could launch low-cost, long-haul flights under a new brand as part of plans by the carrier’s new boss to compete with carriers in the Middle East and budget airlines. Chief executive Carsten Spohr, who joined
Monarch has options on a further 15 aircraft
Phil Davies
Monarch Group has announced plans to buy 30 Boeing short-haul aircraft worth $3.1 billion, plus options on a further 15. The company said it was in the process of finalising terms with the US manufacturer for the purchase of the next-generation Boeing 737 Max 8 aircraft. The group’s Monarch Airlines arm
operates a fleet of mainly Airbus aircraft. Group executive chairman Iain Rawlinson said: “This announcement is an important milestone in an exhaustive three-year evaluation process, and a key part of Monarch Group’s transformation and renewal.
“Boeing truly understood our business and put together a complete package that fits extremely well with our ambitions for the group.
“With this announcement, we begin another chapter in our long and fruitful relationship with Boeing – something that now stretches over 40 years.” Monarch Airlines managing director Andrew Swaffield said: “I joined Monarch
IAG PLACES FIRM ORDER FOR 20 AIRBUS A320NEOS
International Airlines Group (IAG) has converted 20 of the 100 Airbus A320neo options it announced in August 2013 into firm orders.
The new-generation aircraft, valued at $92 million each, will be delivered in 2018
“Boeing put together a complete package that fits extremely well with our ambitions for the group”
Airlines because it has a unique brand and exceptional people. “We see an opportunity to bring back
warmth and a personal touch to a very commoditised European aviation market. Our size enables us to deliver on this promise. “With this fleet replacement, we are choosing the correct number of aircraft and the correct size of aircraft to help us create an efficient, year-round European operation that maximises profitability. “Our process has been rigorous and fair and I am delighted to have been given the opportunity to lead it to a successful conclusion. “Having reviewed all of the options in the
marketplace, we concluded that the Boeing 737 Max 8 is the aircraft that best fits our future route network strategy, enabling us to tightly control our unit costs while offering a superior service to our customers.”
and 2019 to provide cost savings and environmental benefits. New technology and improved
aerodynamics will lower fuel burn and CO2 emissions by 15%, as well as providing noise- reduction and performance advantages. The A320s are intended
to replace 21 of British Airways’ short-haul aircraft, although IAG said they would be “reallocated if the airline
in May, hopes to attract leisure travellers with cheaper tickets and no-frills services, while still keeping the airline’s premium namesake brand. The German carrier is in advanced talks to set up a joint long-haul operation with Turkish Airlines, Spohr said, although Lufthansa could go it alone. “There are markets where we believe that the Lufthansa brand is important. In other markets, we believe that cost sensitivities are so high that we don’t need a full-service brand,” he said, explaining that the market for leisure travel was growing faster than business travel via hubs. Spohr’s plan is for Lufthansa to expand its
low-cost European service through subsidiaries Germanwings and Eurowings, while potentially introducing a new one for long-haul flights, as budget rivals and Gulf-based airlines put a squeeze on profits.
It could consider offering long-haul flights from Munich or the western German cities of Cologne and Dusseldorf, with a premium section for higher- paying passengers, using Boeing 767s or Airbus A330s. If Lufthansa’s
board approves the plans, flights could start by the end of 2015, according to Reuters.
Lufthansa’s new chief executive Carsten Spohr
cannot make a profitable return from its short-haul business”. The parent company of BA, Iberia and Vueling has negotiated a “substantial discount” from the list price for the new aircraft. The 100 options are part
of a Vueling order for up to 120 A320 family aircraft. The remaining options
can be used for any of the airlines in the group for aircraft replacement requirements.
17July 2014 —
travelweekly.co.uk • 71
“The A320s could
be reallocated if BA cannot make a profitable return”
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