Mumbai: Germany’s flag carrier Deutsche Lufthansa AG wants to increase flights from India to 2007-08 levels, South Asia director Axel Hilger said in an interview. Lufthansa is keen to help India’s flag carrier Air India join the Star Alliance, a global network of airlines, by March 2011, he said. Edited excerpts:
What are your plans for India? How profitable are operations here?
Things are looking better. Volcanic ash is over. So everything is set to catch up for the lost time. We want to restart earning money. We wanted to go back to (flight) frequencies at old levels of 2007-08. We have already increased frequencies in Mumbai-Munich, we have replaced some of the capacity with A340 planes, adding 80 more seats. We are thinking about adding more capacity from Pune. Regarding profitability, despite one-day pilot strike and four-day ash cloud impact, we have done well in first four months of this year comparing corresponding period of last year. Yields are increasing and premium traffic is coming back.
How big is Indian market for you and how many transit passengers you carry?
Except the US, India is the only country in this world where we fly seven destinations. In China we fly five. From India, transit passengers are something like 65-70%. Of total passengers, 30% go to Germany, 30% to Europe and 30-40% to the US.
Better connectivity: Lufthansa’s Axel Hilgers says apart from the US, India is the only country from where the airline flies seven destinations. Rajkumar/Mint
Are you feeling the heat as airlines that also carry transit passengers, such as Emirates, are adding more points than you?
Honestly, we don’t have to do things differently in India. All parameters are the same for everybody. Airlines such as Emirates are adding more points even in the secondary cities as they also target labour traffic to West Asia. We don’t target that. Also, those airlines will have to add more points because they don’t have a bigger domestic market. We have a better connectivity throughout the world through our own network, Star Alliance and new alliance called Atlantic Plus Plus.
You are among 16 foreign airlines that are not paying commission to travel agents even after the Directorate General of Civil Aviation (DGCA) insisted you pay it on every ticket sold. Why are you not complying?
This is a wrong word that we are no complying. We are 100% compliant to the DGCA order. If somebody reads DGCA order carefully, he will find out that all 16 carriers have introduced a net fare model and not a transaction fee model. I will give a net fare to the agent and they can do whatever they want. We are 100% compliant.
It also says the quantum of commission is the discretion of an airline. And it is clearly recognized by the authorities that the relationship between airlines and agents is a commercial one.
And the authorities should not and did not go into commercial relationships. Our commission is part of the fare, but the quantum of commission can be decided by us. And that quantum of commission can be zero. We don’t pay commission on tickets sold. But there is performance-linked bonus.
But you are paying commission in some countries. Isn’t that double standards?
Yes, there are still a few countries in the world where Lufthansa pays commission. We are going to reduce commissions to zero in all major aviation markets and India is playing the premier league in this. Let me tell you, I have no interest in making travel agents live in hardship as 96% of our ticket sales come from travel agents.
When are you bringing Airbus A380 to India?
As our chief executive officer and chairman Wolfgang Mayrhuber said in January during his India visit, when India is ready for handling A380, Lufthansa is also ready. However, we need at least four to five months for planning.
How about investing in an Indian airline?
We have no intention to invest in any Indian carrier at this moment. And the reason is obvious. We have bought a lot of European airlines to form the big Lufthansa group. Firstly, we need to optimize these acquisitions. Once this is done, we will look for other opportunities. We are the mentors for Air India to join Star Alliance. So there is no real need to create a new airline or buy a new airline.
How will Air India benefit from joining the Star Alliance? Can Jet Airways also be a member?
Air India will join the biggest network on the earth with 27 members. You get more passengers, hotels get more tourists, more synergies and better frequent flyer programmes. India qualifies for having more than one carrier in Star Alliance. But don’t get things wrong, Air India is our priority and our first partner. We want to see Air India join Star Alliance latest by March 2011. If afterwards, this market is so big and if Star Alliance is interested in a second carrier, obviously Jet Airways would be one of the candidates.
Lufthansa has also gone through bad times before, but turned them around. Can Air India, which is suffering huge losses, learn anything from you?
I cannot speak for Air India. Air India has to do its homework on its own for joining Star Alliance as well as turning around its operations.