Lufthansa’s New Leisure Airline Unit, “Ocean”

Filed Under: Lufthansa

Lufthansa is in the process of securing an air operator certificate (AOC) for a new leisure airline unit, named “Ocean.”

Lufthansa’s complicated low cost carrier structure

Over the past decade we’ve seen a countless number of major global airlines introduce low cost carriers, to better compete in hyper-competitive markets, and in some cases to also cut staffing costs. Some of these airlines have succeeded, while others haven’t.

Lufthansa has had an especially challenging time with low cost carriers. The carrier’s long haul low cost flights out of Germany have operated out of Frankfurt, Munich, and Dusseldorf, under four different subsidiaries, including:

  • Eurowings — this is Lufthansa’s primary low cost carrier
  • Brussels Airlines — this has long been a hybrid airline, and some long haul planes have operated on behalf of Eurowings
  • Lufthansa CityLine — this is Lufthansa’s regional subsidiary, though the airline had transferred some A340s to its fleet
  • SunExpress — this is part of a joint venture between Lufthansa and Turkish Airlines

Lufthansa describes the current model as “fragmented,” though that’s probably an understatement. Lufthansa hasn’t had much success with its current structure, so it’s planning on making some changes.

Brussels Airlines A330 in the Eurowings livery

Lufthansa’s new leisure subsidiary, “Ocean”

As mentioned above, Lufthansa is in the process of applying for an air operator certificate for a new subsidiary that will be named Ocean. Note that Ocean is only the name for the air operator certificate, though the airline won’t ever be branded as such. Rather it’s expected that the airline will have Lufthansa branding.

What’s the plan for the Ocean subsidiary?

  • It is intended to be a quality leisure airline, similar to Edelweiss in Switzerland
  • The subsidiary is expected to launch flights in 2022
  • Ocean will initially have 11 planes, with four based out of Frankfurt, three based out of Munich, and four based out of Dusseldorf
  • These planes will fly to leisure destinations, so could take over some long haul routes like Frankfurt to Tampa, Frankfurt to Anchorage, Munich to Las Vegas, Munich to Orlando, etc.


We’ll see what Ocean’s onboard product is like

Bottom line

As much as it may sound ridiculous for Lufthansa to get yet another air operator certificate for a leisure airline, this concept seems fairly well thought out, assuming the airline doesn’t revise its strategy yet again.

Ocean will operate flights under the Lufthansa brand to leisure destinations, and could fly many routes that are currently operated by CityLine and Eurowings.

What remains to be seen is what planes will be used by Ocean, and also how exactly Lufthansa will be saving on staffing costs without causing issues with unions, since presumably that’s a motivation here (Air France eliminated the Joon concept largely as a gesture of goodwill towards employees).

What do you make of Lufthansa’s plans for Ocean?

Comments
  1. Lufthansa has incorporated a new entity named Ocean to operate long-haul flights to tourist destinations and reduce the “complexity” of the group’s current presence in that segment.

    The German airline tells Cirium it is in the process of securing an air operator’s certificate for the new unit, which will not operate under its own brand.

    Lufthansa describes its current long-haul tourist operations as “fragmented”, noting that it employs four AOCs for such routes from its main hubs in Frankfurt and Munich and from Dusseldorf.

    With the largest airport in Germany’s most populous state, Dusseldorf has for decades been a long-haul departure point for several airlines, including Lufthansa and the now-defunct Air Berlin.

    Lufthansa serves long-haul tourist destinations both through its budget subsidiary Eurowings and under its mainline brand.

    Eurowings’ long-haul routes have been operated by the German arm of SunExpress – Lufthansa’s leisure joint venture with Turkish Airlines – using a fleet of A330s. However, SunExpress in June disclosed a plan to shut down its German operation.

    In the past, Lufthansa additionally recruited Brussels Airlines, another group subsidiary, to operate flights on Eurowings’ behalf. But after a review in 2019, Lufthansa took commercial control of Eurowings’ long-haul flights and the Belgian carrier’s remit was changed to concentrating on network services from its home country.

    Under its own brand, Lufthansa deployed a number of A340-300s with denser cabin configuration on leisure routes, using a unit interally dubbed Jump which operated the widebodies under the AOC of Lufthansa’s regional CityLine division.

    When Lufthansa adopted a new collective agreement with mainline pilots in 2017, the airline promised it would abandon Jump, to appease the unions. CityLine’s website still lists A340s as part of its fleet today.

    In April, Lufthansa said it would phase out three CityLine-operated A340-300s as part of wider fleet-reduction measures in response to the coronavirus crisis.

    Lufthansa has not specified the four AOCs it is currently using for long-haul tourist flights. The group says that the “new AOC” will result in a “significant reduction in the complexity for the development of the long-distance tourist [network]”.

    The airline declined to specify a launch date or aircraft types for Ocean, but refers to a 2019 presentation that shows Lufthansa wants to merge its “current fragmented [tourist-market] operating units into one AOC until 2022”.

    According to that presentation, the group had stationed four long-haul jets in Frankfurt, four in Dusseldorf and three in Munich for tourist routes at the time, while the objective of the new, merged division is to facilitate “high flexibility and competitiveness”.

    Lufthansa says that Ocean will concentrate on “touristic short- and long-haul routes” from its Frankfurt and Munich hubs and “complement the portfolio of Lufthansa and Eurowings”.

  2. Intercontinental destinations: LH, OS, LX, SN
    Intercontinental leisure destinations: Ocean
    European hub-to-hub: LH, OS, LX
    European leisure destinations: Ocean
    Rest of Europe: Eurowings

    So much for reducing complexity

  3. What an idiotic name for a plane and an even more delusional plan to launch an entity like that at a time like this. Amazing to see how grossly mismanaged LH can be, unecessarily. Leisure travel is dead until there’s a vaccine or a solution to COVID19. Ocean is a terrible name and the concept of an airline within an airline has been tried and failed so many times.

  4. I never understood, why doesn’t Lufthansa ever base planes at Berlin?

    We have flow on Eurowings (Rome-Vienna Route) and it was great.

    Not sure what’s their objective, perhaps to lower employment costs?

  5. so instead of normally misplacing my luggage somewhere inside FRA, this new branch of LH will just drop them into the ….Ocean ?

  6. What a muddled and incomprehensible strategy LH has! Talk about diluting the reputation of your brand. Frankly, I am not a fan of this “airline within an airline” strategy. It never seems to work well, is sometimes disastrous (hello, Ted?), and nearly always results in at least some confusion and disgruntlement. Like flying an AC flight and unexpectedly finding your connection is a AC Jazz flight (on a 25 year old AC with 29″ pitch).

    Eurowings is a ball and chain for LH as it is, what makes them think that doubling down on this nonsense will do any better?

  7. Biggest gangster Airline on this planet!
    Ther is one more AOC registered for the Low Cost channel for LUFTHANSA-Group, the Austrian based EUROWINGS Europe with a base in Vienna, Munich, Salzburg and Palma de Mallorca!
    That already shows what a gangster company that LUFTHANSA is. Those low cost carriers have mostly very old planes, flying under LH code!
    there Cabin Crew are flying under the much cheaper and much looser restrictions of the Austrian based AOC EUROWINGS Europe!
    BIG shame on that Airline Group! Far away from any 5* Carrier!

  8. Seems like almost all commenters have missed that this is a paper airline only and will fly under the LH brand. This is purely to keep mainline pilots off leisure routes and keep their costs down and profits up.

    But according to the first commenter, if true, their solution to the pilot union’s disagreement over a paper airline to keep costs down was to axe it and create a new paper airline to keep costs down. Says a lot about a company that keeps creating shell companies to skirt union agreements and labor rules.

  9. If anything Lufthansa should learn from Air France, who finally realised customers were confused with too many brands and closed down Joon. Hop! Became Air France Hop!

    Lufthansa goes the opposite direction creating multiple brands and confusion

  10. This will most likely be my last Lufthansa flight, if I have a choice. They bait and switch planes and the A340 is a horrible plane to fly. Their customer service is next to none and an upgrade to business gets you P class, which equals zero miles. Thanks a bunch. At least they’re getting me home, but that’s about it…

  11. Yes, I know. It’s only a ‘paper name’ for the new unit. But honestly, is that really a name you want to associate with any airline!? You would think that after germanwings 9525 they would steer well clear of topographical names like ‘mountain’ or ‘ocean’. Either that or LH execs have a morbid sense of humour or just don’t care.

  12. Could I assume that Lufthansa’s business airline, is actually United, Air China, Singapore and Turkish? And that the leisure brand, is Virgin.

    By setting up this reliable, adult oriented Virgin, perhaps SkyTeam and Star Alliance and oneworld could potentially reinforce the brand reliability while giving it a touch of class.

    So in a sense, Virgin Atlantic becomes a super SilkAir or Cathay Dragon style airline for the European biggies.

  13. Never underestimate the devious Teutonic mind.

    Ocean is quite clearly aimed at “the Ocean” ie the Atlantic Ocean.
    Anyone spotted “Star Alliance” and the EU flag.
    Any LH various entities ARE PRECISELY meant to confuse, so as not to look too big. They also typically try to make themselves look stupid to outsiders. It’s a technique.

    Puts me in mind of Disney buying portions of adjacent land under different names in Orlando, to finally join them together. Not that I’m saying he was devious, just for the record.

    Meantime, this is all done by LH on Govt (EU) money, when Germany said no other govt should intervene financially in their carriers.

  14. Hmmm… as I tweeted you two days ago about this subject Ben (Lucky), it is unfortunate how they-Lufthansa-spend their 9 billion Euro bailout.

    You did not address this in the blog. Previous posters to this site called this two months ago….

  15. “Leisure travel is dead until there’s a vaccine or a solution to COVID19. ”
    According to LH, business travel is pretty dead and that is why they want to focus even more on the leisure market.

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