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RIYADH (Zawya Dow Jones) – Deutsche Lufthansa AG, Europe’s second-biggest airline, will double the number of flights to Saudi Arabia in an effort to tap demand for business travel to the oil-rich kingdom, a company executive said.
Offering new Suadi Arabia Flights starting March 29 is “inline with linking the oil-producing countries with Germany and Switzerland,” Rolf Koller, the Saudi general manager of Lufthansa and its affiliate Swiss International Airlines, told reporters in Riyadh.
Lufthansa is betting that growing demand for business travel between Europe and Saudi, the Middle East’s largest-economy, will help offset a slowdown on recession hit routes elsewhere. The collapse of oil prices since last year was supposed to provide relief for airlines, but the global financial crisis has dramatically reduced demand for travel, and carriers are facing mounting losses.
The International Air Transport Association, or IATA, said Friday the combined losses of the world’s airlines this year will be substantially deeper than the $2.5 billion it had earlier predicted, and warned that airlines could continue to be in the red in 2010.
Airlines have recently implemented a variety of survival tactics. Many have grounded airplanes or rearranged aircraft to cope with the reduced demand. Emirates said it will redeploy its two Airbus A380 superjumbos flights from New York to Toronto and Bangkok routes beginning June 1 because of falling passenger numbers.
Others are removing some premium seats – usually the most profitable revenue sources – as customers and businesses trade down to less expensive cabins. Global premium air traffic fell 16.7% in January compared to a year earlier, according to the latest IATA figures. Lufthansa is implementing both tactics. It plans to reduce capacity 0.5% globally this summer, and is adding 22 economy seats to its Boeing 747-400 fleet. Koller said the airline will use the reconfigured planes on its Saudi Arabian routes, a sign that consumers in one of the world’s most resilient economies haven’t escaped unscathed from the global economic downturn.
source: www.mb.com.ph
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