World Economy

Lufthansa Targets Mideast With Premium Economy

Lufthansa Targets Mideast With Premium EconomyLufthansa Targets Mideast With Premium Economy

Lufthansa will launch premium economy service to the Middle East later this month, as it goes head-to-head on quality with Persian Gulf rivals, Airwise news website reported.

The German carrier has often been at the forefront of a war of words between established Western airlines and their Persian Gulf competition including Emirates, Etihad and Qatar Airways.

The Persian Gulf trio have grown rapidly by offering high-end service to wealthier customers including in-flight showers and butler service. This expansion in the eyes of Lufthansa and others has been augmented by state subsidies which go against Open Skies agreements on air travel - allegations denied by the Persian Gulf carriers.

Although critical of their growth, Lufthansa is now attempting to compete with them on similar product offerings, with premium economy beginning October 25 for Middle Eastern routes.

It has already rolled-out the service, part of a €3 billion ($3.4 billion) global investment, to US and Asian routes and aims to have it on all intercontinental destinations by the end of 2015.

“We’re convinced that all these investments will put us in a good position with our competitors,” Lufthansa Group’s regional director for Persian Gulf, Iran, Pakistan and Afghanistan, Karsten Zang, told reporters at a event in Dubai.

Zang hopes the investments will lead the carrier to be the “first five-star airline in the Western hemisphere”.

Lufthansa is banking on increased revenue from a larger premium class customer base but Zang did not say what the impact would be or what targets have been set.

Hit by on-going pilot strikes over early retirement issues that led to 1,000 cancelled flights in September, Lufthansa is pushing ahead with a cost-cutting overhaul with a streamlined management structure it said will boost profit by €500 million ($564 million) a year.

Zang said that because the airline is keeping its customers informed in an efficient matter, people are getting to their destinations.

“We don’t see a huge impact yet,” said Zang.