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EUROWINGS COUNTS ON THE AMSTERDAM-CONNECTION

The Management had travelled to a luxury hotel in Frankfurt for the announcement. The men around Eurowing-Boss and co-owner Reinhard Santner had to pass important information on to the media. Eurowings will join - as German partner - the alliance of KLM and Northwest Airlines and it is well known that this partnership has a lot of clout as far as global competition is concerned.

There has already been a close affiliation between the Germans and the Dutch in the past. However, only now the Amsterdam Connection has been formally sealed, agreements over individual distances have been agreed contractually. And what is more: The contract, which will be valid for eight years, gives amongst other things Eurowings' full membership in KLM's Frequent Flyer Program.

The airline had difficulty in collecting the required air miles. Since there was no Frequent Flyer Program in existence, and air miles for the KLM program were only awarded on some selected distances, Eurowings' flights were not attractive enough for passengers, who flew a lot. This is why Eurowings had tried time and again to gain access to Lufthansa's mighty Miles & More-Program. Lufthansa, however, resisted tenaciously. Their quarrel resulted in the two opponents up before the Federal Monopolies and Mergers Commission. However, Reinhard Santner explained, that Eurowings did not have time for a drawn out court case. The answer to the Air Miles Problem is blue and white and carries the KLM as well as the Eurowings emblem: With the "KLM/Eurowings co-branded Card" one can now collect and use air miles with KLM's "Flying Dutchman" Program on Eurowings' route network. This means that the long desired marketing instrument is finally in place. Only the Paris routes are exempt, because Eurowings flies these routes for Air France.

The French are disadvantaged by their German partner's change of direction towards the KLM. "We will continue to fly for Air France on the German market, but this co-operation will not be expanded," informed Eurowings' Boss Reinhard Santner. "The French were pretty annoyed," a member of the executive committee said.

However, according to Santner it was important to establish priorities. After all the KLM coalition created a solid foundation for future investment and secured Eurowings' development. It suited the Germans well that Alitalia joined the KLM/Northwest alliance a few months ago. They agreed to work as a team with the Italian national carrier.

Eurowings planes now take off from Cologne/Bonn, Nuremberg, Hanover and Stuttgart with code sharing. The destinations are Milan and Rome respectively. Better safe than sorry. "We want to combine our common turnstiles Amsterdam, Rome and Milan as best as we can," explained a KLM Official.

The Amsterdam-Connection has big plans, especially in the Federal Republic of Germany. KLM's Director in charge of Germany Bart Vos stressed, "Germany is one of our biggest single markets and altogether very important." The market share of the Dutch currently lies around seven per cent. It is planned to extend it to fifteen per cent. And this job is to be carried out by Eurowings. Before they co-operated with the Germans the KLM flew 232 times from nine German airports to its turnstile Amsterdam-Schiphol. That was three and a half years ago. Now united, 15 airports in Germany are scheduled with twice as many flights. The amount of passengers increased sharply from 350,000 to about 800,000. Ten of the fifteen routes are served by Eurowings. It can, in contrast to the big KLM, service provincial airports profitably. The reason being as a medium size airline its cost structure is more favourable.

Eurowings is a phenomenon. It started in 1993 as an alliance, born out of desperation, between two failing Regio-Carriers NFD and RFG. Today it is established in Germany's aviation market. Even if it is not among the companies making the most profit, it is not in its infancy any more. With a mixture of own flights, co-ordinated flights and charter flights Eurowings' business is getting more and more successful. Reinghard Santner is expecting a turnover of DM720 million for the running year. Five years ago it was less than half this amount. Meanwhile the fleet consist of 40 aircraft, 13 of these are jets. If Eurowings changes its second Airbus option into an order, seven A319s will be part of the fleet in a few years. Very soon new regional jets will replace most of the ATR-Turbo Props. Possible candidates are the new Airbus A318, the 728-Familiy from Fairchild Dornier or the planned Regio-Jet from ATR. This was made public during the annual conference or the Regional Airline Association ERA. The British specialist journal "Airline Business" even chose the airline from Dortmund-Wickede to be the champion among the fastest growing airlines in the world. Reinhard Santner has now issued the motto, "We do not want growth at any price". Eurowings is no longer a pure regional carrier. "Airline Business" envisages the airline to be among the 100 biggest in the world as far as turnover goes.

From page 22 of FLUG REVUE 12/98