Lufthansa makes new plans for Private Jet service

 - December 27, 2007, 11:31 AM
Lufthansa is ordering its own business jets to replace those supplied thus far by NetJets Europe (NJE) for Lufthansa’s Private Jet service. The German-based carrier claims the success of the service makes a sound business case for buying the aircraft. However, NetJets Europe decided to terminate its contract with the company last August on the grounds that it was providing point-to-point service when it had agreed to provide connection flights. This presented Lufthansa with something of a dilemma.

Lufthansa Private Jet is advertised as a luxury connection for first-class passengers. Passengers taking long-haul flights to a major Lufthansa hub such as Frankfurt can use a business jet to reach their final destination. Under a 2005 contract Lufthansa and NJE renewed last year, NJE was providing the business jets and crews.

At some point the market shifted, and NetJets Europe re-evaluated its position. “The agreement was about providing mostly connection flights, but we ended up providing mostly point-to-point flights,” an NJE spokesman told AIN. Last month, Lufthansa confirmed, “Seventy percent of passengers fly point-to-point within Europe.”

NJE terminated the contract when it determined that providing point-to-point service under a different brand was inconsistent with the contract. “This sparked a six-month wind-down period until February,” the NJE spokesman said.

The two parties disagree on the date the termination becomes effective. Lufthansa said the agreement is valid until next month. Meanwhile, NJE maintained that Lufthansa on December 12 used the very last flight hour it could, according to the aircraft shares it owned. Lufthansa denies it has owned shares in NJE’s fractional ownership program.

Lufthansa has made arrangements for its Private Jet service to continue. “We have secured other providers; we will not leave our customers without the Private Jet service,” the Lufthansa spokesman said. The German carrier is in the process of ordering some business jets, probably between five and 10.

“We would have had to cater for growth anyway,” the Lufthansa spokesman asserted. Due to long lead times and demand for exclusive cabin interiors, the airline expects some wait for the delivery of its business jets. Until its fleet is complete, it will use executive air charter operators. It might also buy or lease interim aircraft. Lufthansa expects to have its in-house operation up and running this spring, ending the need for external providers. All definitive aircraft should be delivered by the fall, according to the plan.

One question still hangs over the compatibility of external providers with Lufthansa’s IOSA label. IOSA, which stands for IATA operational safety audit, is a certification that few business aviation players in Europe have. In the IOSA registry, AIN could find only NJE and PrivatAir. Lufthansa claims it can have other partners, but AIN understands that an IOSA airline can use only IOSA partners if the only name the passenger sees is that of the airline. “Our interim partners already operate with IOSA carriers; some have standards that are even higher than IOSA,” the Lufthansa spokesman said.