BERLIN (Reuters) - Lufthansa’s budget airline Eurowings is setting up a separate digital company to drive sales of products beyond tickets to passengers and better compete with online travel agencies such as Expedia and Booking.com.
In an internal message to staff, Eurowings said online travel companies and other airlines such as Ryanair and easyJet already run successful online platforms offering new services and products and that it saw a chance to do the same with its 40 million passengers.
With ticket prices having dropped in recent years, airlines are constantly looking at ways to generate additional revenues from passengers, whether by selling food onboard, charging for bags, or offering more services for when passengers reach destinations.
Ryanair has previously said that it wants to be the Amazon.com of travel, while easyJet earlier on Tuesday said it wanted to expand its holiday business and add a new loyalty scheme.
The new Eurowings digital company is the first major initiative by CEO Thorsten Dirks, who joined a year ago from telecoms firm with the remit to use his digital expertise to help drive growth at Eurowings.
“In five years, Eurowings won’t be a traditional airline, but a digital company with a flight operation,” Dirks said.
The new digital company will be based in Cologne and start with 30 staff, which Eurowings wants to expand to 150 people. It will invest tens of millions of euros in the expansion.
Eurowings generated online revenues of over 1 billion euros (885 million pounds) in 2017 and is aiming for 1.5 billion this year.
Reporting by Victoria Bryan; Editing by Maria Sheahan