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We're not afraid of competition: Lufthansa

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`We do not disagree with the new EU law. But the big debate is whether it is logical.'

Mr Wolfgang Mayrhuber, Chairman of the Executive Board and CEO, Lufthansa.
Mr Wolfgang Mayrhuber, Chairman of the Executive Board and CEO, Lufthansa.

Ashwini Phadnis

Hyderabad, Feb. 22

THE Chairman of the Executive Board and CEO of Lufthansa, Mr Wolfgang Mayrhuber, was in Hyderabad recently on board the inaugural flight from Frankfurt.

The arrival of the maiden flight marked the start of Lufthansa offering connections from five Indian cities to Germany and from there onwards to various parts of the world.

During his one-day visit, Mr Mayrhuber spent some time with newspersons to address a host of issues.

Excerpts from the interview:

Would Lufthansa be interested in participating in development of airports here?We would like to offer our knowledge. Generally we don't invest outside our hub. We have invested in cargo handling activity in various parts of the world and I believe that it is big enough for a joint venture in India. However, there are no firm plans right now.

The airline's wish list for the forthcoming air services bilateral talks between India and Germany?

We feel that the growth in capacity should be linked to the growth in the country. If India predicts double-digit growth, then we feel there should be a similar growth in services also.

Besides, we would like to secure what we have today for both Air India and Lufthansa.

What is the impact of private sector airline flying on international routes?

We are not afraid of competition and there is no market where we do not compete. Besides, we also have an on going Euro 1.2-billion cost reduction programme that is focused on productivity improvement, process upgrade and aircraft utilisation.

What does the airline feel about new EU law requiring airlines to pay compensation if flights are delayed?

We do not disagree with the new law. But the big debate is whether the new law is logical, especially as it requires us to pay even when the airline is not the root cause of the problem.

If there is snowfall in Munich and all flights get delayed then what will happen? Next week, the US President is scheduled to visit Germany. If the airport is closed because of the Presidential visit, will we still be required to pay? Besides, there is also the issue of whether an airline be charged for malfunction of infrastructure.

However, with the reliability of our operations the impact of the new law on Lufthansa will be minimal.

Would you look at lowering agent commissions from the current level?

Two-thirds of global sales are done without commission. It (lowering of commission) is something that will enhance the travel industry. But this can only be done when the market is ready. It is fair for the customer to know what they are paying for the ticket and what they pay for the service.

(This article was published in the Business Line print edition dated February 23, 2005)
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