Economy services at Lufthansa Airlines

The new CEO of German airline Lufthansa Carsten Spohr said yesterday that the company may launch low-cost long-haul flights under a new brand, as part of a plan to face competition from Middle Eastern companies and budget airlines.

Carsten Spohr, who took over Europe’s largest airline by revenue in May, needs to restore investor confidence after a profit warning last month wiped $2 billion from the company’s market value in a single day.

According to Reuters, Spohr revealed yesterday his plans for the company, saying that Lufthansa will focus more on attracting tourists with low-cost tickets, while limiting them to basic services.

Lufthansa faces many challenges, including Middle East carriers that are aggressively expanding on long-haul flights and budget airlines that are attracting travelers on short flights.

Lufthansa shares extended their gains and rose three percent to 15.47 euros by 11:56 GMT, becoming one of the biggest gainers on the Stoxx Europe 600 index of the travel and tourism sector.

Spohr said that 75 percent of intercontinental trips and 79 percent of European trips are for private reasons, not business trips.

Therefore, Lufthansa intends to expand its low-cost services under the umbrella of a holding group called «Wings». The company is already expanding its German-Wings brand services to operate short flights within Europe, and intends to expand the business of its regional company «Euro-Wings».

On long-haul flights, Lufthansa is considering operating flights from Munich or Cologne and Dusseldorf.

Spor said the company could go ahead with its plans alone or with a partner and that it was in advanced talks with Turkish Airlines.

Turkish Airlines share jumped 2.76 percent to 6.69 lira by 1207 GMT, after touching 6.72 lira.