‘We Intend To Grow Our Market Share By Over 50 Per Cent By The End Of 2006’

No other carrier offers better connections and more direct flights between India and Europe than Lufthansa. Werner Heesen, general manager - passenger sales and director South Asia in conversation with Anindita Chattopadhyay talks about the carrier's expansion plans, strategies and industry issues

What has been the performance of the India market last year?

That India is a very important market for us is evident from our growth pattern over the years. It has moved up from the third largest market for Lufthansa in the Asia-Pacific region in terms of revenue to the second largest market. The sector has contributed over 13.2 per cent to the overall revenue in 2001-2002 and we are expecting operational profits for 2003.

With the addition of the recent Delhi-Munich flights, what will be your strategy to promote the two sectors of Delhi-Frankfurt and Delhi-Munich?

Apart from promoting our new hub of Munich, the Delhi-Munich flight has been planned keeping an eye on the tourism perspective. Recently, Munich has been polled as the most attractive city in Germany vis-à-vis leisure facilities, scenic beauty, infrastructure and quality of life. Further, Munich also has excellent connections to smaller Italian cities and other metro cities of Europe. While the Munich flight targets leisure tourists from India to Germany and Europe and from Europe and Germany into India, Frankfurt offers connectivity to other continents and is ideal for business traffic. Hence, the Munich sector has convenient daytime departures to save two nights of accommodation.

How do you plan to promote the destination?

Thomas Cook, which is a 50 per cent shareholding of Lufthansa, is already promoting the destination. Further, we are enhancing our collaboration with tour operators as Munich is the home of upmarket tour operators like ADAC and Studiotso who are also targeting India's FIT market with packages.

Lufthansa has a 14 per cent market share, at least 5 per cent more than its nearest competitor. How do you plan to hold your own?

Expansion is the answer. We intend to grow by over 50 per cent by the end of 2006 and it is a feasible target. By end of 2005, the capacity of the Delhi market will double with 14 flights in place - seven to Frankfurt and seven to Munich.

When other airlines are struggling to get additional frequencies, how come Lufthansa is getting the nod?

We have a constructive and mutually beneficial agreement with Air-India. They plan to expand via Frankfurt making it a second hub and are supporting Lufthansa to grow in India.

What is Lufthansa's fleet acquisition plan?

We have placed orders for 10 each of state-of-the-art Airbus A340-600s and A330-300s. By end 2007, we will get delivery of all the 15 Superjumbo A380s.

Dovetailing with your plan to increase capacity, would you be flying any of these bigger aircraft to India?

The market structure has the potential, but the Delhi airport doesn't have the infrastructure and bay to park such big aircraft. If Bangalore reaches its ceiling, then we might fly in the A340-600, an extended version of A340-400, to optimise capacity.

Unethical booking has led to ballooning of distribution cost. How are you fighting the menace?

This is a serious issue and we are fighting it in our own way. We have in place a sophisticated method to detect an agent who is not authorised to book a certain segment, or an agent who is doing fictitious booking for the sake of money generation. In the first case, we stop interaction and force the CRS to withdraw his transactions as we don't honour the transactions. In the second case, we charge the agents for cost procured by us in Euros. If you ask me the only way to solve the problem is to have a Code of Ethic which will be legally binding for agents, CRS and airlines.