Airlines seek oil & gas travel edge

September 1, 2012

Germany's Lufthansa continues to beef up its international oil & gas routes with the launch of Airbus A380 service between Houston and the company's Frankfurt hub. Russell McCulley was invited along for the inaugural flight.

Lufthansa flight 440 departed Frankfurt Airport 1 August, bound for Houston's George Bush Intercontinental with more than 500 passengers onboard, a near-capacity load for the worlds largest passenger aircraft. That's half a village, quipped A380 fleet captain Joachim Schwarzenberg. I'm no longer a captain; I'm a mayor.

The German carrier operates a fleet of 10 Airbus A380s and has 17 on order, and is replacing a number of Boeing 747-400s with the newer 747-800 wide-body jets; two out of an order of 20 have been delivered. The decision to bring the A380 to Houston reflects healthy demand, particularly in oil & gas business travel, and confidence on Lufthansa's part that demand will remain strong, said Karl Lehman, director of regional sales for the central US market.

karl lehmanOur planes were full. So this is an opportunity. Karl Lehman, Lufthansa

The decision was basically a mathematical one, Lehman said of the increased capacity on the daily Houston/ Frankfurt route. Our planes were full. So this is an opportunity. When your plane is full and you want to grow in a market, you can bring in another flight, or bring in something bigger. And this is as big as they get.

flight 440Lufthansa flight 440 arrives in Houston with more than 500 passengers onboard. Lufthansa introduced the Airbus A380 to the daily route in response to increased demand, in large part from the oil & gas industry.

In recent years, Lufthansa has expanded its network to include oil & gas destinations Aberdeen, Stavanger, Malabo and Libreville in West Africa, to name a few and its 2009 acquisition of Brussels Airlines added dozens of European and African destinations to its portfolio. A lot of these destinations we wouldn't even think about flying to, if it wasn't for the (oil & gas) industry, Lehman said.

vinny khoslaAbout 85-90% of our business is oil & gas related. Vinny Khosla, Avia

Lufthansa is hardly alone in its quest to capture a share of the oil & gas travel market. Traditional rivals British Airways, Air France and KLM-Royal Dutch Airlines all fly Houston nonstops to hubs in Europe, with connections to E&P destinations. More recently, Qatar Airways, Emirates and Singapore Airlines have entered the fray, with direct flights between Houston and Doha, Dubai and Singapore, via Moscow, respectively. Next year, Turkish Airlines plans to introduce a nonstop flight between Houston and Istanbul, providing more options for business travel to the Middle East and Central Asia.

To differentiate themselves among oil & gas clients, airlines have fine-tuned connecting flight schedules and in some cases introduced special perks for industry passengers. Lufthansa, for example, offers membership in the oil&energyclub, which grants access to business class lounges and priority check-in, among other incentives.

The A380 also has around 90 business class seats, popular with frequent energy flyers. 'The oil & gas industry is fairly unique in today's environment, because they still buy a lot of premium services,' Lehman said. While the airline does not track the precise number of oil & gas passengers in its system, he said, 'it's safe to say that is the driver of this Houston route'.

And of course, they compete on pricing. 'The airlines offer some special fares for the oil & gas market, and we do focus towards that market as much as possible,' said Vinny Khosla, operations manager for Houston agency Avia International Travel, who was aboard the inaugural A380 flight. 'About 85-90% of our business is oil & gas-related.'

If fares are roughly equal, what other factors weigh into an energy client's decision?

captainCaptain Joachim Schwarzenberg, in the cockpit of the Airbus A380, commanded the aircraft's inaugural flight from Frankfurt to Houston.

'They're always looking for a reliable airline,' Khosla said. 'They're usually going to remote parts of the world, like West Africa and places like that, where you don't really want to take a local carrier if you can help it.'

Industry travel managers gravitate toward tried- and-true carriers 'so that if there are any problems along the way, or even at the destination, they can get help right away', he explained. 'Price is one thing, for sure, but usually they want to have someone reliable to make sure their guys get there on time.'

Over the past year, Khosla has seen a spike in demand for flights to Brazil. United Airlines offers nonstop service between Houston and Rio de Janeiro, and is a Star Alliance partner with Lufthansa, providing connecting services for European travelers. Other airlines offer services between Rio and Houston with connections; the United Airlines flights are frequently sold out, Khosla said. 'The good thing about oil & gas travel is that travel goes on year-round,' he said. 'There's never a lull.' OE



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