30 Minute Interview

'India is one of our strategic growth markets in Asia Pacific'

With planned capacity expansion of the existing group fleet of around 500 aircraft, Lufthansa now has approximately 170 new aircraft, noted for high fuel efficiency as well as low-emission and noise levels and valued at over 14 billion euros (list price), on order. Werner Heesen reveals the airline's plans for India. By Jyoti Koul

Werner Heesen Director (South Asia), Lufthansa German AIrlines

What business model have you adopted for the India market?

India is one of Lufthansa's strategic growth markets in the Asia Pacific region. As a network carrier, we have been continuously expanding our network, including increasing our services between India and Europe in the past few years. In our summer schedule 2008 we hold a strong position in India by offering 50 flights per week from our six gateways - Delhi, Mumbai, Hyderabad, Bengaluru, Chennai and Kolkata. We are linking India 64 times per week with the European continent with our partner SWISS.

Lufthansa will continue investing in India in new aircraft, modern cabin amenities and premium services. Today, we offer localised services onboard which include the employment of Indian flight attendants, a range of Indian meals, reading material as well as in-flight entertainment in eight languages.

What has the growth rate been in the last five years?

Indian routes have expanded rapidly in the last five years. In 2003, Lufthansa flew to four destinations in India, and in 2004, Munich became the second destination from New Delhi, alongside Frankfurt. So our flights have more than doubled. As of the summer 2008 schedule, Lufthansa flies 50 times per week from India to Germany, up from 23 times per week in 2003.

As of May 2008, we will be flying three times a week between Mumbai and Munich - the first scheduled flights between these two cities. Lufthansa will also boost current services between Kolkata and Frankfurt from three to five flights a week, starting June 2008.

What is the airline's positioning?

Our long term plans include exploring opportunities and growing in line with market demand. We also plan to continue expansion of the network with increased capacity, new gateways in India and studying the potential of new destinations. We aim to link India more efficiently with Europe through both Frankfurt and Munich.

Lufthansa is well-positioned in the Indian market. Some of the targets that we have set for ourselves include enhancing customer service, increasing sales efficiency, improving booking management, modernising and expanding the fleet as well as regular optimisation of our products. Lufthansa believes in long-term partnerships and investments and will endeavour to seek opportunities to enhance areas of potential growth in Asia Pacific.

We will serve the Indian market with an attractive package including dedicated service and innovative products on board, premium services like our First Class Terminal in Frankfurt and Lufthansa Private Jet around Europe, and our network and connections to destinations in Europe and the Americas, including our partners in Star Alliance. At the same time, Lufthansa will evaluate options for further growth here.

How would you compare the global aviation scenario to the Indian market?

India's civil aviation passenger growth, at 20 per cent, is among the highest in the world. The projected number of passengers who will be airborne by 2020 is a whopping 400 million, according to the Centre for Asia Pacific Aviation. Lufthansa aims to participate in the growth of India's aviation industry by exploring the various opportunities that it offers.

What is the impact of the increasing ATF cost on your operational costs?

Kerosene is one of the biggest cost factors for all airlines. But it is not just the absolute expense but also the extreme volatility of fuel prices that sets fuel costs apart from other corporate expenditure items. In order to reduce this risk, Lufthansa has since 1990 pursued a successful policy of hedging fuel prices.