The Hindu : National : Air India likely to join Star Alliance, says Lufthansa management

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Monday, Jul 09, 2007
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Air India likely to join Star Alliance, says Lufthansa management

Vinay Kumar

‘Next two years in Indian market very crucial’
India, one of the 10 strategic markets worldwide

FRANKFURT: As merger of Air India and Indian Airlines draws closer, there is optimism among top management of Lufthansa German Airlines that the post-merger single entity Air India will join Star Alliance, a grouping of 17 international airlines.

For the past three years, Lufthansa customers had been benefiting from its close cooperation with Air India, as the German carrier also grew in the Indian market, offering 45 non-stop flights every week from Frankfurt and Munich to six gateways in India — Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai.

In the post-merger scenario, Air India will also meet one of the prerequisites for admission to the worldwide Lufthansa-led Star Alliance. With a fleet of 125 aircraft, it will benefit from the network of Star Alliance that includes carriers such as Singapore Airlines, United, Austrian, Swiss and Air Canada.

“For us India is one of the 10 most strategic markets worldwide. With the Indian Government taking initiatives to improve infrastructure in key metro airports such as Delhi, Mumbai, Hyderabad and Bangalore, we see the next two years in the Indian market as very crucial,” Werner Heesen, Director of South Asia, Lufthansa Airlines, told visiting Indian newspersons here.

The Lufthansa management feels India has greater potential in terms of number of customers than the entire European Union. A forecast from Goldman Sachs indicates that India will take third position among the world’s industrial nations, behind China and the U.S. and ahead of Japan, Germany and other European countries. A survey by Deutsche Bank Research predicts that this position will be achieved by India by 2020.

International air traffic between India and Europe has been increasing around 10 per cent annually.

Mr. Heesen said that over 60 per cent of the Lufthansa passengers between India and Europe were Indians and two-thirds of them fly between the U.S. and India. From all six Lufthansa destinations in India via Munich or Frankfurt there were direct connections to 91 destinations in Europe, 15 in Germany and with one stopover at Lufthansa’s hubs, to 19 cities in North America.

With strong economic growth indicators from India, Lufthansa was changing its strategy to capture the market of private travellers as it had a majority of passengers on its flights from the elite segment of business travellers, he said.

“Despite such robust economic growth, India’s share of world air traffic is currently well below one per cent and is, therefore, only at the start of a sustainable growth phase,” Mr. Heesen said.

The air traffic market in India was changing at a faster pace than in Europe. However, infrastructural problems still acted as speed breakers and the major international airports had exhausted their capacity. New airports in Bangalore and Hyderabad were expected to be ready by 2008 and modernisation in Mumbai and Delhi would end by 2010.

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