As Lufthansa tweaks its business to become more competitive, it has undertaken some interesting actions on the long haul fleet. As the chart below shows, the three aircraft involved are seeing significant changes. The key item here is Lufthansa adding premium economy seating.
The 747-400 loses first class and gets nearly 12% more seats. This allows the airline to focus this fleet on markets which are more leisure focused – or as the airline puts it, “markets where there is less demand for first class product”. Example? Bangkok.
The 747-8 by contrast keeps first class. The addition of premium economy sees fewer economy seats. This fleet is focused on markets where demand for first class is justified. Examples? USA, India, selected Asia markets plus Mexico and Brazil. Possibly Argentina from October (yes how about that, defaulting Argentina). Interestingly Argentina and Venezuela have traditionally been the best first class markets for the airline in South America.
The A380 sees a reduction in seating which goes counter to what one would expect. The logic is there. Premium economy means fewer economy seats. Whereas economy is laid out 3-4-3, the premium economy will be 2-3-2. Moreover, premium economy has 38 inch pitch compared to 31 inches. But here’s the driver; a premium economy seat on average will generate €300 more revenue per leg. Lufthansa’s A380 looks to be a very attractive option for a long haul aircraft in premium economy. Their revenue projection looks reasonable. We expect this idea to be copied in short order.Lufthansa is famous for its “horses for courses” fleet philosophy. Here we see it at work once again. As the table shows, the fleet sees changes from its typical 20% premium seating models. The -400 becomes the leisure market machine while the -8 extracts maximum revenue from the front end in its markets. The A380 plays with space to ensure as many customers as possible buy up to premium economy without giving anything away in typical premium seating. Given long hauls, we expect to the premium economy cabin sell out fast.
(Joel Wagner contributed to this story)
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