FLUG REVUE February 2003: Hapag-Lloyd Express takes off

HAPAG-LLOYD EXPRESS LAUNCHED

By Volker K. Thomalla

On 3 December another no-frills airline was launched from Cologne/Bonn airport: Hapag-Lloyd Express. Punctually at 11.50 a.m. the first Boeing 737-700, sporting the colour scheme of a New York taxi, arrived at Konrad Adenauer airport from Berlin-Tegel, and was accompanied to the gate by a column of Cologne taxis. A huge placard bearing the words, “Your taxi is here,” welcomed the aircraft at the gate in Terminal 2.

The TUI subsidiary is initially using four Boeing 737-700's leased from Germania, which are fitted with 148 seats in a single-class configuration. Next spring the fleet is to be expanded to eight aircraft, when Hapag-Lloyd Express will also start manning the aircraft with its own crew. By the end of 2003, twelve planes will be decked out in the striking yellow colour scheme. The other Boeing 737-700's, however, will not be leased from Germania. As Hapag-Lloyd Express CEO Wolfgang Kurth said, “We will buy them on the market.” At present, Germania pilots are flying in the cockpits of the Hapag-Lloyd Express aircraft. Apparently, it was not possible to use Hapag-Lloyd's own planes as, unlike those of other airlines, they are enjoying good utilisation on charter flights.

The first destination to be served by Hapag-Lloyd Express (HLX) is Berlin. In the course of December, the route network will be expanded to incorporate Milan Orio al Serio, Naples, Hamburg, London-Luton, Venice and Pisa. While the first flight was still flown under Germania flight number ST3123, a separate flight plan code is to be adopted as soon as possible in order that travel agencies can make direct bookings to Hapag-Lloyd Express in the Amadeus reservation system.

Unlike other discount airlines, Hapag-Lloyd Express plans to also use travel agencies as sales channels, although it envisages the majority of bookings coming from the internet. “The internet is the channel that will be used most often,” said Wolfgang Kurth. By 3 December, the new airline had clocked up 140,000 bookings, and, according to Kurth, up to 60% of these passengers have never flown before. The best price for a one-way ticket is Euro 19.90. Ten seats will be available at this price on every flight. After that a graduated price scale will apply. “20% of passengers will fly for Euro 25 or less,” according to Kurth. The most expensive ticket for a flight on board an HLX aircraft will cost Euro 326.

Hapag-Lloyd Express plans to build up its market position through co-operative arrangements with other companies from the travel industry. In addition to one insurance company, a co-operative agreement with Europcar and a hotel chain that is still to be determined will offer customers the possibility of planning and reserving their trips from a single source.

The Managing Director of Cologne/Bonn airport, Michael Garvens, said on the occasion of the inaugural flight that the low-cost carrier market would be a major boost to Cologne/Bonn. He expects passenger numbers to grow by more than 40% over the next year. The proportion of passengers carried by no-frills carriers out of the total number of passengers at Cologne/Bonn is expected to rise to 45%.

Wolfgang Kurth said that he believed the discount airline market in Germany would go through two distinct phases: in the first phase, all the airlines would exist and attempts would be made to go out of the way in the choice of flight destination, as occurred in England at the start of the low-cost airline boom. In the second phase, there would be a cut-throat competition. “I am convinced that we will be among the survivors,” says Kurth. We aren't a no-frills version of Lufthansa, we are a low-cost carrier. We have our production costs under control.” At the same time he also said that the view prevalent amongst sections of the population that cheap means poor quality needed to be corrected. “We still have some work to do in the area of educating the public.”

From page 28 of FLUG REVUE 2/2003

Last updated 15 January 2003

FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany