- In the current very competitive period for airline transportations there are questions concerning the safety and the reliability of such activity. If you were asked to categorize your company at this level, what would be your position on this matter?
Uncompromised safety and security have top priority at Germanwings. Our aim is to ensure a pleasant and relaxed flight for our customers in all areas and, although we offer low prices, where we don't make any savings at all is on the maintaining of our aircrafts or on the qualifications of our pilots and crew members. That is why we have developed our security system around three major axes: our young fleet of modern aircrafts, our thorough technical monitoring, plus a team of excellent trained employees. Our aircrafts, Airbus type A319/320, are not only market leaders in terms of space, noise protection and energy consumption, but are also continuously maintained using state-of-the-art technology. In this domain, we are lucky to be able to make full use of the experience and skills of our parent company Eurowings Luftverkehrs AG and Deutsche Lufthansa AG. Furthermore, all of our pilots have undergone thorough training and have many years of professional experience. They are being trained at the Lufthansa Flight Training Center in Frankfurt, where the training lasts for even longer than the legally required minimum period. The same goes even for experienced staff with several years of flight experience with other airlines: all employees undergo special training again when they join us.
I would thus rank Germanwings at the very top, when it comes to safety and security.
- Do you believe that the low prices in flight fares have a positive effect, in relation with the increase of air traveling, or will there be, at some point, negative effects?
As latest research has shown, low-cost airlines, especially in the beginning, 'activated' a lot of new customers that would not fly before, but used to take the car or the train. Besides, that was the main idea behind the creation of low-cost carriers: to make traveling by air affordable for all people and, thanks to the low prices, to enable more people to travel more often than before. As far as Germanwings is concerned, we could activate a lot of not frequent flyers in the past or the ones that did not fly at all; We also gained many passengers from classical network carriers. This process is still in progress as our growing business traveler percentage shows (currently over 49 per cent). Of course, it is normal that this successful business model attracts new companies in the market, making competition always tougher. However, we are convinced that only airlines that offer a top ratio of price/performance, combined with uncompromised safety, will survive in this very competitive market and we are confident that Germanwings will be one of them.
- In a continuously developing Europe there is an increasing competition of railroad traveling and air traveling. Namely, such cases are Brussels-Paris, Paris-London, and London-Brussels. As it seems, the Blue Star train is gaining market. How can this fact be dealt with?
Railways have always been a competitor to airlines within Europe, especially on short-haul routes, like the ones you have mentioned. In all cases, before introducing new routes we carefully study competition, market developments, the profitability and viability of the new connection. However, even on short distances, traveling by air still has advantages compared to traveling by train, the most important of which is that it does remain the fastest way to travel. The distance from Brussels to Paris, to use one of your examples although it is not a route Germanwings serves, is covered in one and a half hour by train, whereas a plane just takes thirty minutes. And Germanwings has already introduced various services that make traveling even faster and simpler, like the automated check-in in Cologne, but also and most importantly the fact that we fly to city airports that have easy access to the city center. On very short routes, it does make sense to take the train. However, experience has shown that, in some cases, traveling by air can nowadays be even cheaper than taking the train, which was not the case before the creation of low-cost airlines.
- What is your belief about the cost of airports, concerning the low cost airline companies?
Germanwings' objective is to serve the capital of each country, and then the second most important city of it; that is our general policy when choosing an airport. As I mentioned earlier, we also choose city airports with easy access to the city center. The airport costs are a subject of negotiations between each airport and the airline, and these negotiations are, of course, confidential. So although I cannot give you any details, I can say that we have a very good cooperation with all the airports that we fly to and are confident that this will also be the case in the future.
- What does your company represent in today's air market in Germany?
We estimate the market share of low-cost airlines in Germany at around 25%, but we expect it to grow to the UK figure which is much higher, around 50%, in the next few years. Germanwings has only been operating since three years, in fact we just celebrated our third 'anniversary' last October; and has in such short period become market leader in the German low-cost sector. We already have four hubs in Germany, Cologne, Stuttgart, Berlin and Hamburg and even plan the opening of other new bases, possibly even outside Germany. At Cologne/Bonn airport we are the biggest airline with a market share of over 30%. In Stuttgart we are the biggest low cost carrier with around 20% market share. Only Lufthansa flies more passengers from Stuttgart than us, but we are even positive to be the biggest airline by the end of the year. Strategic goal of Germanwings is to emerge as leading low-cost carrier in terms of market share and prices also in our two new hubs, while a further goal would involve a minimum market share of 30% in all airports where our aircrafts are stationed. At the same time, Germanwings operates one of the most successful European travel webpages, visited by 2.5 to 3 million users each month, who make Germanwings, thanks also to our cooperating partners, the market leader in the low-cost sector in this respect too.
- Do you offer international flights? If not, would you consider establishing such an activity?
During its rather short period of operations, Germanwings has already developed an excellent and attractive route network to primary 43 destinations in Europe (summer flight schedule 2006). From our four hubs in Germany, we fly to city airports and to all the important capitals in Europe, like Paris, London, Rome, focusing on destinations that are not farther than three hours time. At the same time, we try to develop a well balanced route network with destinations both attracting leisure and business travelers, who are also very important to us. From our hub in the Cologne/Bonn Airport we have developed the denser route network among low-cost airlines in continental Europe, serving 39 destinations in our Winter Timetable 2005/2006. But also in Stuttgart we recently expanded to six new destinations, reaching a total of 21, while our newest hubs in Berlin and Hamburg already serve 11 destinations each in the Winter timetable. Germanwings was also one of the first low cost airlines flying to Eastern Europe. Currently we operate eight connections e,g, Moscow, Warsaw, Zagreb with outstanding success. Due to these positive developments, we plan to continue with the extension of the route network. We are continuously evaluating new destinations in Germany and abroad and watch closely the market developments.
- Is there any cooperation with Lufthansa?
Eurowings is the 100% parent company of Germanwings and the 'regional carrier' from Lufthansa, operating flights on behalf of Lufthansa in the 'Verbund Lufthansa Regional'. Lufthansa is a 49% shareholder of Eurowings.
- Please provide us with some data concerning the economical and social status of your company
Our financial figures for the year 2005 have been very promising: during the first six months of 2005, our turnover increased by 60% compared to last year and this was the increase also in the number of passengers. Our seat load factor has also been on the increase, from 77,8 % in 2003 to 82% last year and 83% during the first half of 2005. And we have ambitious goals for the future: the number of passengers that is expected to reach 5,5 millions in 2005, should exceed 7,5 millions in 2006, while our turnover, from the estimated 400 million euros in 2005 should amount to 570 million in the coming financial year. Thanks to our figure of turnover per passenger (today at 60-80 euros), as well as the high seat load factor, we believe that we will remain in a position to avoid a price increase, despite the increased fuel costs.
Concerning the passengers, in the moment Germanwings has got more than 40% business travelers- which is a very high figure for a low-cost airline. Although business travelers often book late and pay for the more expensive tickets, they still save a lot of money compared to booking their tickets at a network carrier. Of course the majority of our clients remain leisure travelers. Although the majority are German, the percentage of foreign bookings is around 30%. Students and young people are also an important part of our clients, as they represent around 30%.
- Do you intent to initiate a connection program with Greece, or co-operate with a Greek private company?
Since 2003, Germanwings has been connecting Athens with Cologne/Bonn and Thessaloniki with both Cologne and Stuttgart and from there further on with our pan-european network. All routes have so far performed very well and have been very successful, especially since the ties between the two countries have always been extremely close. Germany is Greece's number one trade partner and business relations are getting closer every year, but also thousands of Germans visit Athens and the rest of Greece every year, for business as well as for pleasure. Last June, celebrating our two years of operations in Greece, we baptized one of our aircrafts after the City of Athens, also thanking our Greek customers for their confidence in Germanwings. With the start of our Summer Timetable 2006 we believe we can repeat this success with a third destination in Greece, as Heraklion in Crete will be connected with Cologne/ Bonn. This way we are not only further extending our offer to Greek travelers, but also creating an important for Greek tourism air connection between the beautiful island of Crete and Germany. As for our partner airlines, we have two partners, BMI Baby in the UK and Centralwings in Poland for sales cooperations. We are open to new possibilities and will see what the future will bring concerning other potential partners, but at the moment we are not in discussions with any other airline.
Dr. Andreas Bierwirth CV
Born in 1971 in Lόnen, Dr. Bierwirth qualified as a bank clerk and from 1993 to 1997 studied business management at the Wilhelms-University in Mόnster. After completing his studies he worked as an assistant to Dr. Heribert Meffert, a well-known Marketing Professor and author of many marketing books, at the Institute for Marketing at Mόnster University. In November 2001 he obtained his doctorate.
Already during his studies, he took on the position of Managing Director at Westair GmbH in Dortmund- an airline with smaller aircrafts. In April 2002 he joined the management team of Eurowings Flug Gmbh which in September 2002 became Germanwings Gmbh. He was initially Deputy Managing Director and on January 1st 2005 he became Managing Director of Germanwings Gmbh. He is responsible for the business areas Marketing and Product, Sales, Business development and the Corporate Communication Centre.
He also has pilot training, he has completed training at Lufthansa's commercial flying schools in both Bremen and Tucson, Arizona (USA). He is married and has a son of 1.5 years.
By: N. Peter Kramer
