Duesseldorf International Airport

Lufthansa responds to Air Berlin at new Berlin airport, but success far from guaranteed

As Berlin's airport fragmentation ends with a new airport to open in Jun-2012, Germany's two biggest carriers are pursuing different strategies for the long-awaited airport, yet the strategies are forcing each other to respond. Air Berlin dominates short-haul traffic from the capital yet has high costs and low yields, indicating its transformation from LCC to hybrid carrier has not been followed by the market, whose premium passengers remain with Lufthansa, who has long been under-represented in Berlin, Germany’s largest city.

Air Berlin is banking on traffic feed, in particular from its oneworld members, to boost profitability, an outcome that may prove to be elusive as carriers continue to favour Frankfurt with its financial centre and accompanying premium traffic. Lufthansa will defend its market share from Air Berlin's chance of success with an equally ambitious measure: slashing costs by a third to better compete on short-haul traffic while continuing to ignore Berlin's long-haul traffic opportunities that Air Berlin has seized on. Each carrier wants the success the other has achieved, but neither are on a firm path to realise their ambitions.

Munich Airport reports record traffic, north & west Germans seek alternative airports to avoid taxes

Munich Airport continued its impressive gains throughout the first half of 2011 by notching up a six month passenger traffic record. It comes at the same time as the government’s tourist tax has begun to drive German passengers in the north and west of the country over the border into the Netherlands to avoid it.

Air Malta troubles worsen as unions flex muscle and LCCs grow

Air Malta’s troubles have become more acute as the struggling carrier’s unions increase their opposition to large-scale redundancies. Prime Minister Lawrence Gonzi has stated the present situation is increasingly worrying, particularly in light of the EUR77 million the government has poured into the airline since Jun-2011.

Ryanair in the dock

Ryanair may have to repay millions of euros as Germany’s highest court ruled fees it has received to operate from airports may amount to subsidies in breach of EU competition rules. Lufthansa and airberlin have been awarded the right to pursue legal action accordingly. Together with the other difficulties the Irish airline faces in Germany could this be the beginning of the end for its operations there? Or might there be even more significant outcomes?