FRANKFURT (dpa) – The battle of cut-throat prices in Germany’s civil aviation sector is getting tougher. With special offers and new routes to woo air passengers, discount airlines Germania and Ryanair are throwing down the gauntlet to the powerful airline Lufthansa.
But the market leader is striking back and the battle is one now keeping the Federal Cartel Office in Bonn, as well as the courts, busy. In the middle of economic recession and only five months since the September 11 terror attacks in the United States, the market is now undergoing changes.“Those who want to throw punches can’t expect that their opponent isn’t going to hit back,” Lufthansa chief executive Juergen Weber said about the situation.Europe’s second biggest air carrier says that not only Germania’s cheap tickets are the problem, but also more fundamental issues.The airline says it would be unacceptable if the office ruled that Lufthansa may only lower its rates as far as 40 euros (36 dollars) above those of Germania.This would mean that in the future Germania could dictate Lufthansa’s ticket price levels, Lufthansa board member Ralf Teckentrup said.Germania meanwhile is busy making plans for further regular route services at cheap ticket rates.“The market is big enough for several suppliers,” Germania managing director Mustafa Muscati maintains. In the summer, the airline is going to operate regular flights between Berlin and Cologne, while services to Munich, and on the Munich-Hamburg route are also being considered.These routes could also pose a challenge to Lufthansa by its biggest competitor on German domestic routes, Deutsche BA. The Cartel Office has noted that even yet, on three-quarters of its inner-German routes, Lufthansa is the sole airline.Courts have already had their say with regard to Ryanair. The Irish company’s advertisements drawing comparisons with Lufthansa’s ticket rates were forbidden after an unfair competitive practices suit brought by the German airline.But while losing in court, the Irish airline gained a lot of “favourable marketing” from the publicity linked to the court case, noted Uwe Weinreich, civil aviation analyst for HypoVereinsbank.After the northern German city of Luebeck and the centrally- located Hahn, 100 kilometres from Lufthansa’s main hub in Frankfurt, Ryanair soon will be offering flights to and from the southern city of Friedrichshafen.The airline’s recent order for 150 new passenger jets underscores its aim to establish itself among the top European air carriers by the year 2010.Weinreich said that the competition posed by the discount airlines cannot be underestimated, as it could cost Lufthansa a number of passengers in the economy class segment. But for the moment the German airline faces no dramatic danger.“Cheap flights are another product in another market segment,” he said.At Lufthansa, officials note that Ryanair is not offering services identically parallel to those operated by the German airline. Whereas the Irish are using smaller and cheaper airports, Lufthansa has a network of larger hubs.All the same, the moves by the agile competitors are being closely watched by Lufthansa management. It is normal business practice to react to the prices being offered by competitors, officials say.
