Eurowings is expanding its presence in the tourism sector by launching its own travel agency, Eurowings Holidays, in response to increased demand for Mediterranean vacations among Germans. The airline aims to cater to leisure travelers, offering a comprehensive package that includes flights, accommodations, and other services. This strategic move comes as business travel declines and the airline industry adjusts to shifting passenger demographics. Meanwhile, TUI operates with its own airline, balancing advantages and challenges in the competitive market.
Eurowings Expands Its Horizons in the Tourism Sector
Since the onset of the pandemic, the aviation sector has witnessed a significant boost, largely driven by the travel aspirations of Germans. To capitalize on this growing enthusiasm, Eurowings has taken a bold step by launching its very own travel agency.
Germans Flock to Mediterranean Destinations for Summer Getaways
The phrase “Off to the south” perfectly encapsulates the summer vacation plans of many Germans. The German Travel Association (DRV) reports a surge in demand for package holidays to Mediterranean hotspots this year, with Turkey, Spain, and Greece topping the list. Consequently, Mallorca and Antalya are in a tight race for the title of the most favored travel destination, as revealed by TUI spokesperson Aage Dünhaupt.
Despite facing numerous crises and economic hurdles, the desire to travel remains resilient among Germans. This is promising news for the German aviation industry, as leisure travel has emerged as a key growth driver in air traffic since the pandemic. According to Eurowings CEO Jens Bischof, the flight demographics have shifted dramatically: prior to the pandemic, 60% of flights were for business purposes, while only 40% were for leisure. This trend has now reversed.
For the first time since the pandemic, more passengers are flying from European airports than ever before.
Eurowings Holidays: A Comprehensive Travel Experience
The decline in business travel is particularly noticeable on domestic routes in Germany. The airport association ACI Europe has highlighted a partial shift towards rail travel, with a reported 6.3% decrease in passenger numbers on domestic flights compared to 2019. Many business travelers have yet to return, prompting Lufthansa subsidiaries to pivot their focus towards tourist destinations, as noted by ARD aviation expert Michael Immel.
This summer, Eurowings plans to operate 412 routes to approximately 142 destinations across 36 countries, primarily targeting tourist hotspots. Additionally, the airline has taken a significant step by launching Eurowings Holidays, which will combine flights with other travel services such as accommodations, transfers, and rental cars. Bischof emphasizes that the 20 million passengers can now conveniently book their entire trip directly through them.
Immel views this move as logical, stating that Eurowings is positioning itself as a comprehensive travel provider, allowing customers to enjoy “holiday flights as an all-inclusive package.” With the DRV estimating that around half of vacation spending this year will come from package and modular trips, this strategy appears to be well-timed.
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Strategic Acquisition and Future Developments
The concept of providing everything under one roof is not new in the travel industry. Airlines like Easyjet have successfully diversified into travel operations with Easyjet Holidays. While Eurowings Holidays has been in existence for some time, it is now being launched as a distinct entity. The HLX group previously managed the travel website under the Eurowings brand, with Eurowings only partially involved in the package holidays sold.
To ensure a smooth launch of Eurowings Holidays, over half of Kögel’s employees and IT systems will be integrated into the new company. Michael Immel considers this a smart move, as it enables the airline to accelerate the project’s development.
Since its establishment in 2020, the HLX group has successfully built Eurowings Holidays into a profitable venture, with the potential to sell up to 2,000 trips on peak days. With around 250,000 customers expected in 2024, the revenue is projected to reach nearly 300 million euros.
Initially, Eurowings Holidays focused on last-minute offers to fill unsold seats and hotel vacancies. However, the goal is to evolve into a provider of tailored modular trips, supported by a team of digital experts. This shift is beneficial, as vacations are typically booked well in advance, ensuring better aircraft occupancy for Eurowings, along with higher profit margins on package deals.
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TUI: A Different Approach to Travel
Similar to Eurowings, TUI operates as a tour operator, utilizing its airline TUI Fly to transport tourists to their holiday destinations. However, TUI also benefits from its own hotel properties, creating a unique advantage.
Aage Dünhaupt explains that having an in-house airline allows TUI to guarantee that its hotel destinations are adequately served, particularly in regions like the Canary Islands and the Greek islands. For instance, around 90% of passengers on a TUI Fly flight are guests who have booked a TUI package holiday.
Nonetheless, managing its own airline comes with challenges for TUI. While it reduces reliance on competitors’ pricing strategies, it also exposes the company to market fluctuations. Should an airline exit the market, it could create pricing opportunities for remaining carriers. However, if operational costs become excessively high, the business model could face viability issues.
As more airlines are canceling flights to and from Germany, the industry is growing increasingly anxious.
Ticket prices are anticipated to continue rising, as foreign airlines have begun adjusting their operations. Ryanair, for instance, plans to withdraw from Dortmund, Dresden, and Leipzig starting next summer, while also scaling back services in Berlin and Hamburg. Other airlines, including Condor, WizzAir, and Easyjet, are likewise reducing their offerings in the German market.
In a previous version, it was inaccurately stated that the revenue would be “just under 300 billion euros in 2024”; this has been corrected to millions.
This topic was covered by Deutschlandfunk on January 6, 2025, at 1:49 PM.