Lufthansa Reviews U.K. Demand After Brexit, Plans No New Routes
(Bloomberg) -- Deutsche Lufthansa AG is examining whether it may need to vary frequencies and aircraft types on U.K. routes as the pattern of demand shifts following Britain’s decision to quit the European Union.
While the outcome of the June 23 vote has caused a degree of uncertainty that could lead some businesses to review expansion plans for the U.K., the weaker pound may prompt a surge in tourist visits, Heike Birlenbach, the German carrier’s vice president for European sales, said in a briefing in London.
“Up until now the U.K. is always a market where there is lots of international businesses, where they start and develop,” the executive said Thursday. “This is kind of on hold.”
The Brexit vote has had no discernible impact on bookings as yet and Lufthansa group carriers have taken no steps to curb U.K capacity, Birlenbach said, though the company doesn’t plan to add any new routes there next year. She said that’s as much a result of over-capacity throughout Europe as it is a reflection of Britain’s economic prospects.
Lufthansa has added seats to the U.K. in each of the past five years, with all of its units opening up new routes, among them an Austrian Airlines service from Vienna to Manchester, a Brussels Air flight to Edinburgh and a link to Aberdeen operated by the namesake brand.
All-told Lufthansa airlines carry about 7.3 million people to and from Britain each year, with slightly under half of them traveling through London Heathrow, where the group is the second-biggest operator, Birlenbach said.
Outline plans for next summer’s British operations will be reviewed but the timetable isn’t usually decided until six months before the new season and capacity can be varied by drafting in larger or smaller planes as late as six weeks before a flight, the executive said.
The glut of seats is “immense” on trans-Atlantic routes from European hubs, she said, with stuttering economies and the spate of terrorist attacks weighing on demand, compounded by the entry of low-cost, point-to-point carriers. Lufthansa controls about 30 percent of the North Atlantic market with joint-venture partners United Continental Holdings Inc. and Air Canada.