Wolfgang Will, Director, South Asia, Lufthansa Passenger Airlines, talks about the emerging scenario in the Indian aviation sector as well as Lufthansa’s performance and initiatives to further strengthen its position in India
Lufthansa has been operating in India for over 55 years now and its services have consistently grown. The carrier plans to continue investing in new products and services in order to further increase presence and offerings in the Indian market.
With the new Civil Aviation Policy on the anvil, how would you explain the emerging scenario in Indian aviation sector? What is your expectation from the new Policy?
The aviation sector in India has been growing consistently and we feel this trend will only continue in the years to come. The new civil aviation policy by the Ministry of Civil Aviation is a good sign and a boost for the domestic aviation sector which will benefit the larger aviation eco-system as well. We are pleased to see the strategic initiatives planned by the government with regards to positioning India as a MRO hub in Asia, strengthening the domestic infrastructure and increasing connectivity. We believe there was a need for such change and we look forward to more such planned policies in the future that will leverage India’s potential to be among the global top three nations in terms of domestic and international passenger traffic.
What is the current operational profile of Lufthansa in India? Is there any expansion plan?
The Lufthansa Group alone operates 67 weekly flights and along with its partners and Star Alliance partners, has one of the largest growing networks to offer to its passengers including those from and to India. India is a priority market for Lufthansa and the airline will continue to invest in new products and services in order to further increase its presence and quality in India. Lufthansa already operates A330, A340 and B747 on its routes from Mumbai, Delhi, Chennai, Pune, and Bangalore to Europe and strives to better its product offering for the Indian customers.
India has been the first market in Asia to receive the new business class and to receive Lufthansa’s new Boeing 747-8. Our latest offerings in 2015 included the refurbishing of the Business Class as well as the roll out of the Premium Economy class on several routes.
How has been the year 2015 for Lufthansa in India in terms of load factor and yields? What is the expectation from 2016?
Lufthansa considers India as one of the most important long haul markets. Lufthansa’s main offer to Indian customers is unrivalled connectivity to the entire world. By linking India to the world, Lufthansa supports the rapid globalisation of India’s industry - brings in investors and tourists and carries Indian exports to the far corners of the world. As part of Lufthansa’s policy, we do not share profit figures. However, we are very pleased to say that Lufthansa has received an overwhelming response from the Indian market. There is a consistent growth in the occupancy rates and we are expecting to see more passengers
Have you noticed any impact of the US$18 GDS surcharge on bookings in India? Would you like to give any message to travel agents in India?
Airline customers have a variety of options for finding out information about airlines’ offers and services and booking them. The various booking channels are associated with sometimes significant cost differences for the airlines. To date these costs have been generalised and passed on to all passengers as part of the ticket price. The costs for bookings via Global Distribution Systems (GDS), in particular, far exceed those of other booking channels and are increasing significantly again this year. In future, in the interests of a fairer allocation of distribution costs, part of these costs for GDS bookings will be passed on in the form of a new charge. With effect from September 1, 2015, the Distribution Cost Charge (DCC) has been incurred by those customers whose bookings are made via GDS. Customers and travel agencies have options to book flights with Austrian Airlines, Brussels Airlines, Lufthansa and SWISS directly DCC-free.
The Distribution Cost Charge (DCC) keeps in account the considerations of our key partners, the travel trade community and provides them with the option of booking tickets without the DCC, using the online portal. In contrary to the preferred fares programme the DCC does not touch the processes of travel agencies. It will be billed automatically. Furthermore the DCC gives travel agents an opportunity to further explore differentiation options with regard to their offers to customers.
How important is B2B segment for you?
Lufthansa’s success in India would not be possible without the strong support from our business partners – the Indian travel trade. We are constantly engaging with our trade partners through various offers and initiatives. The travel industry has undergone many changes and we have constantly tweaked our business models and introduced new concepts roll out best offers for our business partners.
Last year, you introduced premium economy in India. How is the response from the market?
We believe an offering like the Premium Economy fits well for India. We were apprehensive about this at first but then grasped that such a class onboard Lufthansa airlines is gaining a lot of popularity.
Since its introduction last year, the Premium Economy offering has seen excellent response from the Indian market and our customers are very happy with the new product. Cumulative September 2015, we are witnessing over 85 per cent load factor all our flights including in the Premium Economy compartment. We have promoted our Premium Economy offering extensively through advertisements, social media and public relations.
You have always been coming out with innovative promotional and marketing strategies. What is in the pipeline in 2016? Are you coming out with some new product/packages?
India is a strategic market for us. Exhibiting a Soul of Germany and a Heart of India, In 2014, Lufthansa launched a TVC, specifically made for the Indian market “More Indian than you think”.
In 2015, reinforcing the messaging for their “More Indian Thank You Think” philosophy, Lufthansa unveiled the #Diwalisurprise campaign which is the brand’s first ever all-digital campaign and the second largest Campaign after A380 that has been launched in the Indian market.
In early 2016, as a part of an ongoing effort to engage with young passengers, we introduced the ‘Your Announcement’ contest for children who enjoy flying. The contest was very well received with 22,000 visits and over 250 registrations from nine countries.
We also plan to reinforce our commitment for strengthening our connection with Indian audience through the prism of Lufthansa’s “More Indian than you think” philosophy with a host of initiatives such as #RunwayToSuccess, season 4. We have organised a Startup Expo on April 23, 2016 in Gurgaon which is the first ever initiative in India to bring together an ecosystem that can provide startups all the support they need to succeed at one place.
What is the latest development on ‘Eurowings’? When it is expected to be in India?
Deutsche Lufthansa AG’s Eurowings started long-haul services on October 25, 2015. Eurowings operated initially on long-haul routes to Dubai, Thailand and parts of the Caribbean. Eurowings has started operations with two Airbus Group NV A330 wide bodies and will grow to a fleet of seven long-range planes in additional to its short-haul jets. This is a global development and it is too premature for us to comment on plans for India market.
What is the profile of the Indian customers who travel with you?
Everyone who travels is a 'TG' for us. We serve a diverse mix of leisure as well as business travellers to and from India. Earlier, others were only concentrating on the leisure segment while we focused on business segment. But in the last six years, the trend has changed. At present, we have a 60:40 ratio for business and leisure but it has to be noted that that people who travel with us on business often end up taking leisure trips with families.