How Gulf airlines might fit into future of long-haul travel

Lufthansa CEO Carsten Spohr forecasts that only 12 airlines will share major international routes including three based in the Gulf region
How Gulf airlines might fit into future of long-haul travel
Carsten Spohr, CEO of German airline Lufthansa. (Getty Images)
Tue 20 Aug 2019 02:36 PM

Only a dozen airlines will eventually share the aviation market for major international routes, predicts Lufthansa's CEO, while a possible future economic crisis could "accelerate" a consolidation in air travel.

"The sector is evolving towards a dozen companies operating worldwide" on major international routes, in addition to smaller national or regional airlines, Lufthansa boss Carsten Spohr told reporters late Monday.

Without naming them, Spohr forecasted there would be "three in the United States, three in China, three in the Gulf and three in Europe".

The Lufthansa chief executive warned that any future economic crisis could hit European airlines particularly hard, but predicted a downturn could "accelerate" mergers and acquisitions.

"If there is one positive aspect to the flattening of the global economy, and certainly also the worsening figures for all airlines -- unfortunately also for us -- it is that the consolidation process will tend to accelerate," Spohr added.

The recent bankruptcies of German low-cost airlines Air Berlin and Germania have enabled Lufthansa to buy back flight routes and aircraft.

The airline industry is "much more cyclical" and at the mercy of economic developments than others, Spohr said, with the sector suffering from international trade tensions.

Lufthansa wants to "and will play an active role" in any future consolidation in the sector, said the airline boss, whose company's net profit dropped by 70 percent in the second quarter.

Spohr said Lufthansa faced strong competition from low-cost airlines in a "unique price war", however "we will not be driven out of our domestic market" by low-cost companies like Ryanair, because the German airline "has the financial strength to resist" competition.

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