Softly softly with labour will be the key to lower costs
The aim, says Mr Spohr, is to "disconnect the brand from the labour agreement". Not only does this allow a lower cost base in the new operation, but it also puts pressure on unions in the core business as it demonstrates that growth is possible through lower cost platforms. In this respect, Lufthansa is following the lead taken by other airline companies such as IAG and, more recently Finnair, in developing a 'Plan B' approach to labour relations.
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At this stage, Lufthansa has not given details of the new long-haul operator's likely cost base relative to its existing operations. Labour costs are very often the key to cost advantage in the airline industry and Lufthansa has, to date, not taken advantage of this possibility to any significant degree. It will also need lower aircraft operating costs, but is keen to launch the carrier with existing equipment in order to test the concept.