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'We have challenges but our yields are picking up'

May 24, 2010 09:32 IST

After eight years in Paris as Lufthansa's General Manager - France and Benelux, Axel Hilgers shifted to India. He is currently Director, South Asia. Having worked in France, West Asia, North Africa and India, Hilgers says the Asia-Pacific region is currently doing the best after the recession and Lufthansa had load factors of above 80 per cent in Asia for April. He spoke to Business Standard. Excerpts:

Lufthansa had launched all-business class flights to Pune. How are they doing?
The decision was made at the wrong time,when corporates had restrictive travel policies. We are now offering 32 business and 60 economy seats on the Pune route.

Pune has 200 corporate houses and big German companies such as Daimler have production sites there. Corporates had prohibited their executives from travelling business class, and we realised they were flying to Mumbai and catching an economy flight.

However, now the policies are less restrictive, with business class travel being permitted and small and medium enterprises allowing economy travel so the combination is good. We don't have any plans of adding new destinations, as we already fly to seven destinations within India and operate almost 300 flights per week via codeshare.

Lufthansa is one of the primary supporters of Air India joining the Star Alliance. Is enough being done to ensure their entry?
India is a priority destination. I am speaking for all Star Alliance carriers when I say a member-airline in India is very important for operators.

We have supported Air India in all the criteria that need to be met. However, the homework needs to be done by them. Air India CMD Arvind Jadhav is also pushing hard for it.

What changes has Lufthansa made to counter situations such as bad weather and recession?
It's important to react and adapt quickly. Sometimes, it is better to park your aircraft than fly. Also, during good times, it's crucial to prepare for the next crisis. We have also optimised our resources.

In India, electricity is expensive, while in some countries labour is expensive, so operations need to be set in a manner where you save the maximum. Lufthansa shut its ticketing offices and decided to pass it on to agents. In India, 96 per cent of our sales are now through travel agents, and three per cent through our website.

How is the Indian market looking?
India is picking up at an average growth rate of 30 per cent. Though seat loads have increased, our yields are picking up even better. The yields for business class are especially good.

We are hoping for stable operations in the summer and, hopefully, volcanic ash won't cloud our skies again. Pune is looking especially good and we may apply for increased capacity, up from the three flights a week that we currently operate on that route. Though we are yet to get to 2007 levels, we are expecting to reach them soon through the group as a whole.

What challenges does Lufthansa face in India?
It's always a challenge to fill a plane, with the right yields. APAC is no exception.

Challenges such as bad weather and strikes have suddenly jumped up, something we never expected and we have lost quite a bit of money even in the pilot strike which lasted for a day. Competition, infrastructure and smooth integration are always a challenge.

Sneha Kupekar
Source: