off radar. Lufthansa sees more action in its Central Europe home markets

The turbulent financial times that the Indian aviation industry has been experiencing have led to a lot of speculation about international carriers looking at investing in an Indian carrier.

However, two senior officials of the Lufthansa Group — which has Lufthansa, Swiss, Austrian Airlines, Brussels Airlines and Eurowings — recently told BusinessLine that the Group has no plans to invest in an Indian airline just yet.

Heike Birlenbach, Senior Vice-President, Sales, Lufthansa Group, while declining to comment on Lufthansa picking up a stake in Jet Airways, says, “For the overall market I can tell you (on a) worldwide scale Lufthansa is constantly looking into opportunities, partnerships and so on but there is not a specific comment I will like to make about the Indian market.”

Birlenbach points out that Air India is already a partner with the Lufthansa Group as it is a part of Star Alliance and Lufthansa, Swiss and Austrian are also a part of this grouping. She adds that Air India flies quite a few passengers from secondary cities via Mumbai and Delhi to Lufthansa’s hubs and European cities.

Wolfgang Will, Senior Director Sales, South Asia, Lufthansa Group, says that the group feels honoured that “everyone is looking at it, saying ‘you are a very successful Group, why do you not step into India and things will become better’?”

But he is quick to point out that the Group participates in its home markets in Central Europe. “There (Central Europe) we are experts, we are not experts in India and actually we are focussing on the consolidation process in Europe,” Will adds.

Depreciation dynamics

Will does admit that the depreciation of the Indian rupee against major international currencies is “definitely a worry” as his budgetary achievements are dependent on a euro base and the depreciation of the Indian rupee is a challenge. But he is quick to add that the situation does not reflect the dynamics of the market and the strength of the Indian economy.

“The good news is that we see no decline in passenger demand. We are quite confident that even with the depreciation of the rupee, by adding volume which is basically more load on our flights, we will be making it up,” Will says.

In more positive news for the Group, the rupee’s depreciation has also not led to the India route falling out of the list of the 10 most profitable routes that it operates globally. “We see passenger numbers increasing out of India. Depreciation has two effects. Indian products and services are getting cheaper and more attractive to be exported. So, there are a lot of dynamics. Especially in the corporate segment we have seen a nice hike in demand,” Will says.

However, if this is the case, then why has Brussels Airlines decided to pull out of the Mumbai market? Birlenbach explains that Brussels Airlines’ decision to pull out from the Mumbai market is because it is focussing more on the African market.

“You need to know that the Mumbai service is the only Asia-Pacific service that Brussels Airlines has. In the Lufthansa Group, we believe that with the connections to Mumbai from Zurich, Frankfurt and Munich, we have quite a good capacity offer via Europe to the world,” she says.

In what might spell good news for Indian budget travellers, Heike says that Eurowings, the Group’s low-cost, leisure-oriented, arm, is investigating long-haul operations.

Studying leisure scene

“We are looking into all areas where we have passenger volumes and potential capacity or a demand in the market. It is not specified for India but also not for other markets. We are looking into the leisure scene out of the home market, which is Germany, Austria and eventually also Switzerland,” she says.

Asked whether Eurowings will look to operate charter flights to Goa or other tourist destinations in India, Heike says that Eurowings works in close collaboration with the tour operators, especially the group’s home markets and depending on their demand and the capacity needs, the capacity portfolio might be selected.

“It is not necessarily the decision of Eurowings but rather the tour operators; if there is a charter request for a flight, then we are willing to look into it,” Heike says.

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