Lufthansa budget unit has bumpy start

When Deutsche Lufthansa set up its budget long-haul carrier, it was meant to signal the airline’s fight back against aggressively expanding Middle East carriers. Instead, it has come to symbolize the challenges Germany’s largest airline faces to restore competitiveness. Lufthansa established the Eurowings long-haul service last year to lure back passengers from flying on rivals. Eurowings targets price-sensitive fliers by offering fares Lufthansa can’t match. Services are operated by SunExpress, a joint venture between Lufthansa and Turkish Airlines, and would have 40% lower costs than the main airline, the German carrier has said. The flights from Cologne-Bonn airport are using rented Airbus Group SE A330 widebody planes to destinations such as Phuket, Thailand, and Varadero, Cuba. The effort has been beset by problems, though. It suffered a shortage of crew members to operate the flights, and technical faults have disrupted operations. A lack of reserve planes compounded operational hiccups. A flight from Cuba landed in Germany with 68 hours of delay. With only two planes in its fleet right now, the airline has had little backup when things go wrong. Eurowings chief Karl Ulrich Garnadt acknowledges the carrier has suffered teething problems and said new destinations will be added more slowly. “In the startup phase, due to a combination of factors, we suffered bottlenecks,” he said. Flights to Boston and Miami will commence later than planned and the start of service to Las Vegas could be pushed into 2017, he said. Growth at the budget unit will remain below plans still early next year, Mr. Garnadt said, though is likely to catch up later in 2017. Eurowings has become a central plank in Lufthansa CE Carsten Spohr’s efforts to boost profitability. Story has further details.<br/>