Virgin Express ditches German plans
Virgin Express has abandoned its plans to enter the German market.
The Brussels-based carrier announced in July that it would commence no-frills operation out of Köln-Bonn in December 2002. Since then both Lufthansa and TUI have launched low-cost flights in the North Rhine Westphalia region. Consequently, the German market has become what the Virgin Express board describe as “ a hostile trading environment”.
A statement made by Virgin Express said: “They [Lufthansa and TUI] have stated that their subsidiaries will be loss making for the next two to three years, indicating the German giants are prepared to enter into a severe fares war”.
Lufthansa is launching Germanwings at the end of October, through affiliate Eurowings, which will fly to ten destinations. Lufthansa also announced in August that it would drop domestic fares to €98 including taxes or charges, or €88 when booked online. It also removed minimum stay and advance purchase rules. TUI is launching no-fills carrier Hapag-Lloyd Express in December, which will fly eight Boeing 737s to domestic and European destinations.
Virgin Express executive chairman, David Hoare said:” Our decision to continue our operational focus in Brussels and hold back on Köln-Bonn is based on common sense. We believe that a fares war in the Köln-Bonn market is inevitable, with the new entrants fighting for market share, whilst protecting their base businesses”.
“This will be good for the German travelling public who will at last benefit from low fare scheduled air travel. However, our participation in the changed circumstances existing in the German market would have been unprofitable for us, even with our low cost position. We will continue to keep a close eye on the development of this market. If the new low fare carriers do not live up to the promises they have made, we will review our position.”
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