Lufthansa will next year stop serving Abu Dhabi from Frankfurt.
The German carrier will axe the route at the start of the 2015 summer timetable on March 29, reports Der Spiegel.
So what's the reason for this? After all, isn't Abu Dhabi a main Gulf business destination for all European airlines?
Well, it is. But the problem from Lufthansa's point of view is that yields (the amount of revenue per seat) have fallen because of the over-supply of capacity (ie seats).
Lufthansa has yet to comment publicly, but it's understood that the reason is because Etihad and its partners operate many more flights between Germany and Abu Dhabi than does Lufthansa. More seats equate to lower fares, which is good news for passengers but not for airlines.
For example, Lufthansa operates just a single daily flight from Frankfurt. By contrast, Etihad operates both from Frankfurt and other airports in Germany, with a new link from Hamburg set to start in 2015. Some of these flights are operated by partner Air Berlin.
Lufthansa has high operating costs and it cannot afford to operate low-yield routes. For instance, Frankfurt to Bangkok, which is already considered a low-cost route by Lufthansa, is scheduled to be transferred to its new low-cost, long-haul airline if and when the latter takes to the skies in 2015.
According to Der Spiegel, Lufthansa's dropping of Abu Dhabi is also considered a protest against what the German airline considers to be "unfair" competition from Etihad.
Lufthansa believes the Gulf carriers are trying to undermine Europe's global hubs (subscribers can read our "New world order" feature from December 2010 here). And this is a reason why the German Federal Aviation office is blocking Etihad from operating a range of codeshare flights to Air Berlin (see news, October 13).
But, Etihad is not the fiercest Gulf rival to Lufthansa. Etihad is cited as having 49 flights a week into Germany, with Qatar Airways operating 35 flights. Lufthansa has a mere seven. But Emirates trumps them all with 63 flights.
Alex McWhiter
