Lufthansa’s Eurowings Offers Rock-Bottom Fares to Dubai

Deutsche Lufthansa AG, Europe’s second-largest airline, introduced rock-bottom fares for its new long-haul venture to sharpen competition with Persian Gulf carriers that have been crowding it out of routes.

Eurowings will start serving Dubai from 99.99 euros ($111) one-way on special introductory fares, Karl Ulrich Garnadt, who heads Lufthansa’s passenger business, said at a presentation in Berlin Wednesday. The planes, operated by the company’s SunExpress joint venture with Turkish Airlines, will initially also serve Bangkok and Phuket in Thailand, as well as Varadero in Cuba and Punta Cana in the Dominican Republic, Garnadt said.

“We are not presumptuous to think that we could challenge Emirates with two weekly flights to Dubai given the massive capacity they have,” Garnadt said in an interview. “This is not a provocation, I believe Emirates won’t even notice this.” The venture will start out with promotion prices which will soon be raised, he said.

Starting a low-priced offering to Dubai, the most popular long-haul destination from both Frankfurt and Munich, Lufthansa’s main German hubs, is a shift of strategy. Lufthansa had been pulling out of routes that faced too much competition, deciding in October to end service to Abu Dhabi after Etihad Airways had increased capacity to the city through Air Berlin Plc, its minority-owned German partner.

Smart, Best

Eurowings’ long-haul service will start with two Airbus Group NV A330-200 planes seating 310 from October from Cologne airport and that fleet will eventually grow to seven, Garnadt said. It will copy the price model introduced by the Lufthansa’s Germanwings unit with a “basic, smart and best” fare.

“In the longer run, seven aircraft surely are not the optimum size for such an operation,” Garnadt said, adding that increasing the size of the fleet further would require economic proof that the concept works.

Eurowings aims to be profitable by 2017 at the latest, and the goal might be achievable next year, Garnadt said. The aircraft will be leased by General Electric Co.’s GE Capital Aviation Services, he said.

At 620 seats per week, Eurowings’s offering to Dubai is less than a tenth of the capacity Emirates offers between Munich and that destination, flying 1,036 seats per day.

In the lowest price category, Caribbean destinations will start at 229.99 euros one-way, while the flights to Thailand will start at 199.99 euros.

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