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Germanwing set for makeover

The Lufthansa Group will shortly announce the details of rebranding and repositioning its low-cost asset Germanwings, the announcement being scheduled for December 6, company officials told reporters Thursday.

The move comes as part of Lufthansa Group’s international reorganization scheme aimed at increasing profitability and in particular, to boost earnings on the group’s activities inside Europe that have for years been generating losses, the firm’s head of European communications Martin Riecken said.

The company’s drive to increase its overall profitability is understandable as the group generated an operating result of €628 million in the first nine months of 2012, down €96 million from the corresponding period of the preceding year.

While maintaining its position as a legacy airline, Lufthansa will be looking to lower its operating cots through shifting greater focus to its low-cost daughter Germanwings in European travel, with the target customer base remaining premium passengers.

“The Germanwings you will see will be a completely different one from the one that exists now,” he said. He stressed that just as before, Germanwings, which he dubbed a “reasonable-cost” airline compared to its low-cost rivals on the market, will be aiming to attract passengers through a high level of quality and service.

Hungary still profitable

While the economic situation weighs heavily on Lufthansa’s European operations, the Hungarian one is making pretty decent profits, added the Ofer Kisch, head of the group’s operations in central and eastern Europe.

He estimated that Lufthansa currently controls 30% to 35% of the market offered by the Liszt Ferenc International Airport in terms of passenger numbers. This year, Lufthansa carried some 660,000 passengers in Hungary, marking an annual increase of approximately 10%. On a group level covering the entirety of the Lufthansa Group with its subsidiaries, the total figure comes to around 970,000, he added.

He said that he hopes that Hungary has gone as low as it can get in the ongoing economic crisis and that 2013 will bring overall improvement.

Lufthansa’s current Hungarian capacities, which were expanded shortly after the Malév collapse in February, are sufficient to meet demand in Budapest, but the airline is prepared to expand the range of assets committed to Hungary, whether it’s on an ad hoc or a sustainable basis, if conditions and demand change, he said.

Costly landing

Lufthansa officials were reluctant to discuss in detail the ongoing debate between airport operator Budapest Airport Zrt and the carriers about the heightened expenses of operating in the Hungarian capital.

“We are not happy about the costs increasing,” Ofer said.

Due to a raised tax from local governments for the use of the land at the airport, Budapest Airport has upped the costs it charges on airlines.

Low-cost carrier Ryanair has said it will significantly downscale its presence in the Hungarian airspace unless more favorable conditions are hammered out. As turizmus.com reported, 12 airlines turned to BA in a letter calling for a reconsideration of the new fee regime.

Kisch said that there are currently no talks going on between the airport’s management and the airilines regarding the matter, although Lufthansa too motioned negotiations.

“We want to take further steps regarding this issue,” Kisch said. “I hope to update you in a reasonable time,” he added.