Deutsche Lufthansa AG invested €3 billion to support its new premium service in the Middle East as it sees potential growth in the region.
Lufthansa airline company will offer a premium economy service in the Middle East this month. Starting October 25, Lufthansa will have a new premium economy class in its flights to the Gulf area and Dubai. A restaurant service will be provided in Gulf routes.
Regional Director for Iran, the Gulf, Afghanistan and Pakistan Karsten Zang, said in a report from Bloomberg, "Our new products will help us definitely to be more competitive here in the Gulf region."
Competing with other Gulf-based rivals, the German airlines ventured €3 billion or $3.4 billion for the new services and facilities. The statement said Lufthansa wanted to revamp their service as it aims to achieve the Skytrax five-star rating.
Lufthansa has been rallying against Emirates, Qatar Airways and Etihad in the Middle East for a long time. The Arab News reported this is an attempt to rival against the Gulf airlines. Zang said at an event, "We're convinced that all these investments will put us in a good position with our competitors." Both airlines now offer the same products.
The company said it renovated the management structure. It said the restructure will gain €500 million or $564 million annually. Moreover, Zang said Eurowings, its low-cost unit, will attract more passengers in the Gulf region because it has a competitive cost.
But Zang admitted the pilot strikes could pull the airline's reputation in the future. As of now, they don't see the impact yet. But if the strike persists, it will damage Lufthansa's standings.
According to Lufthansa's news release, last month, on-going strikes of its pilots over the retirement issue had cancelled 1000 flights. Around 140,000 travelers have been affected.
At this time, the premium service is being rendered to American and Asian routes. Lufthansa expects to extend it to all the intercontinental routes by the end of this year.
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