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Lufthansa, Fraport sign deal on cost savings after Ryanair row
July 5, 2017 / 10:06 AM / 3 months ago

Lufthansa, Fraport sign deal on cost savings after Ryanair row

A plane of Germany's air carrier Lufthansa takes off at Fraport airport in Frankfurt, Germany, May 22, 2017. REUTERS/Kai Pfaffenbach

BERLIN (Reuters) - Lufthansa (LHAG.DE) and Frankfurt airport operator Fraport (FRAG.DE) have signed a deal on cost savings, meaning Lufthansa will grow its business at its main hub, the two companies said in a joint statement on Wednesday.

Lufthansa has been discussing costs at Frankfurt airport since the airport operator last year signed a deal with Ryanair (RYA.I) that gives the Irish low cost carrier discounts on fees for new routes started in 2017, which Lufthansa said disadvantaged it.

Lufthansa, which has a market share of around 60 percent at Frankfurt airport, and Fraport said on Wednesday they would lower costs and bring in new revenue by better using current infrastructure at the airport and working more closely together on customer services.

On fees, Fraport said it would not be making any changes to its current application for airport charges for 2018. However, a spokesman said that the incentive program that started in 2017 would be valid in 2018 for new routes.

That would mean that Lufthansa’s budget carrier Eurowings or other carriers could benefit from the same level of discounts as Ryanair had this year if they start new routes next year.

A Lufthansa spokesman said it has still not made a decision on whether to bring Eurowings to Frankfurt.

He declined to provide further details of the cost savings measures, but said the financial benefits achieved would be comparable to the discounts awarded to Ryanair.

“The partners are thus creating the right conditions for the further growth of Lufthansa at Frankfurt Airport,” the two said in the statement.

Lufthansa had previously said it would grow more from its other hub in Munich, and last month announced plans to station A380 jets there.

(This version of the story has been refiled to change day of week in first paragraph)

Reporting by Victoria Bryan; Editing by Maria Sheahan

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