Germanwings makes Hannover its sixith hub

Germanwings, which began in October 2002 as the low cost carrier within the Lufthansa legacy group and servicing 7.2 million passengers in 2009, has added Hannover as its sixth base of operations as it launched London Stansted to Hannover route on Thursday, April 29th. Three Airbus A 319 aircraft stationed in Hanover fly will fly to a total of 16 cities.

Germanwings, which currently has bases in Stuttgart (opened 2003) , Cologne/Bonn (opened 2003), Berlin (opened 2005), Hamburg (opened 2005) will become the third largest airline behind Lufthansa and Air Berlin, with 75 weekly departures to 16 destinations at Hannover Airport directly taking on Germany’s second largest airline and its main competitor, Air Berlin.

Fares are as low as £13.99 one-way including tax, flights from Stansted to Hanover will depart at 7.50am and 8.15pm Monday to Friday, daily at weekends.

Germanwings will have a twice daily service to the North German city of Hannover from Stansted Airport just outside of London. With a heavy concentration on the business travel market, Germanwings aim is to replicate the success seen in Colonge where Germanwings has 16 aircraft based with a total of 4 million passengers.

Germanwings represents a premium form of the low cost carrier model which offers more than just low cost tickets but improved value and service. Germanwings focuses on the business travel market as well as private passengers.

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“You can buy your freedom and luxury” - Chief Executive Thomas Winkelmann.

At a press briefing at Hannover Airport, Chief Executive Thomas Winkelmann said “I believe the customer wants a choice. Middle seat is maybe not the finest way to travel, and there we give our customer the choice,” he says. “The seat is a real value on the airplane. Why do the classic airlines either give it away for free or you can’t even reserve it in advance? No other hospitality industry does all-inclusive pricing, except clubs in holiday destinations” referring to Germanwings use of added value packages and services to attract business travelers looking to save costs without sacrificing services which they might deem valuable on an individual basis.

Germanwings provides above average legroom for a low cost airline with a 30-32 inch pitch between rows. All the seats are made of leather and all seating is assigned, which takes the rush out of boarding to ensure a better overall experience for passengers. For passengers looking to book stop-over flights, the Smart Connect program allows passengers to indicate only the final destination where they wish to travel and pay a total price that is lower than the cost of two separate flights. Catering to business travellers, the airline introduced Private Seat where passengers can reserve a seat next to their own seat, which will be keep free for their own comfort.

Sound Business Model

The Germanwings fleet of 30 Airbus 1 319 are maintained by Lufthansa Technik which allow Germanwings to leverage Lufthansa’s technical expertise in an environment of strong airline safety regulation. Lufthansa also provides fuel hedging and financing for Germanwings which puts the carrier in a strong competitive position.

“We had very little advertising money so we had to try a simple structure” said Winkelmann. The airline recently won the contract to transfer Ford Motor Company employees which is a win-win for both Germanwings and Ford which no longer has to rely on expensive charters. The loyalty scheme called the Boomerang Club, currently has over 250,000 members which rewards passengers with one free return flight when they fly eight return flights while also benefiting form exclusive access to a number offers. With 7 million passengers and generated revenues of more than $800 million in 2009, the airline had the highest EBIT in Germany of all low cost carriers.

Its a “management achievement to have low cost airline within legacy group” added Winklemann.

Expansion

Germanwings has secured traffic rights to Tel Aviv from Cologne however the first priority is to focus on the German Market. With the fortunes of airports being so heavily intertwined with the fortunes of airlines, Hannover Airport has found a partner in Germanwings who has a clear strategy and solid business model. “From today we expect an additional 500,000 passengers out of this operation in 2010 and pre-sales seem to be pretty good and the first flights are full. Raoul Hille, chief executive of Hannover Airport. With Hannover airport being a hub in the Lower Saxony region on Germany with excellent links for rail and the Autobahn, Germanwings has potential for rapid growth however Mr. Winkelmann is cautious saying that “There has never been an airline that went bankrupt because it grew too slowly, but there are ones that went bankrupt because they grew too fast”

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