LONDON – The German subsidiary of SunExpress (XG) is to close down due to the ongoing Coronavirus pandemic.
The subsidiary, which is run by Lufthansa (LH) and Turkish Airlines (TK), suffered a major setback because of the virus as it was forced to ground all of its aircraft. SunExpress as a Group will remain afloat with its AOC’s elsewhere still remaining active.
It is understood that around 1200 jobs will be affected by this move, especially as the likes of LH aim to continue to cut costs in the wake of restructuring and bailout terms.
To offset the shutdown, the flights that the German subsidiary had will be taken over by the Turkish subsidiary with the XG IATA code or by Lufthansa’s Eurowings. The technicalities behind it have not been announced as of yet.
Comments from SunExpress CEO
Commenting on the move was SunExpress CEO Max Kownatzki, who expressed that the focus now remains within the Turkish market.
“SunExpress has been one of the largest airlines in holiday and ethnic traffic between Germany and Turkey for more than 30 years. Together with our shareholders Lufthansa and Turkish Airlines, we have decided to focus on our strength in air travel into Turkey as the home carrier for Antalya and Izmir.”
“With a concentrated route network, a consolidated fleet, and passion for aviation, we will ensure the airline’s competitiveness and future viability, remaining a strong and reliable partner for travel agencies, tour operators, and our direct customers.”
Concetrating on developing countries
According to the CEO, the decision to focus on Turkey is a strategic move to adapt to a “changing competitive environment and future market demand forecast.”
“We believe that by concentrating all our power on a rapidly growing and developing countries such as Turkey, which has a high tourism potential and a strong aviation industry, we will grow and add value with it” he continued.
According to Planespotters.net, there are 13 aircraft in the German subsidiary’s fleet which no doubt will be transferred to the main Turkish wing which has 44 aircraft in its fleet.
A Big Cost-Cut from Lufthansa
In the wake of bailout tensions, LH will be looking to cut costs in return for the €9bn aid package from the German government.
More examples of such cost-cutting have been seen with Brussels Airlines (SN) of which according to La Libre Belgian newspaper, the partnership between the two sides is reaching the end.
As such, the partnership could end shortly where Lufthansa Group would put 55% of its shareholding up for sale, or in the worst-case scenario SN would go bankrupt.
A shock for the German aviation industry
The 1200 jobs lost from the SunExpress Germany shutdown will most likely join 26,000 employees that are surplus to their current requirements.
Overall, this is a big shock to the industry in Germany, especially because of its success in recent years.
For LH, the pressure is evidently mounting if it is making big strides to keep costs at a minimum.
It will be interesting to see how much further changed the German market will look like going forward and more importantly, whether the bailout will be approved this coming Thursday to keep one of Europe’s largest airlines afloat.