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Aviation policy should look at potential of India: Wolfgang Will

Thursday, 5 June 2014 - 7:05am IST | Place: Mumbai | Agency: dna

Lufthansa Airlines is not new to the Indian market. The German carrier has seen the Indian aviation market for more than 55 years now. With increasing influx of foreign carriers in the country, Lufthansa too is gearing up to offer better products and services in this market. With India being one of the top 5 markets for the airline, it is optimistic about the growth in the sector as the new government takes charge. In dna's ongoing series of interviews, Wolfgang Will, director - South Asia, shares his company's plans, and views on policy rejigs required in the country with Yuga Chaudhari.

What are the key immediate steps that the new government should take for the aviation industry?
If you ask an airline operator, he will always repeat and talk about high taxation and fees in India. That's always for us an area that is worrying. High fuel prices, too, unfortunately have been increasing constantly in the last five years. But that's not just in India. Each and every country's government is very creative when it comes to tax. There will be taxes on passengers, tourists, environment tax etc. In Germany, we have a lot of tax. In every country, I don't know why they think that there should be additional tax on aviation.
So expect some relief here. Actually, it's more challenging for domestic airlines who are struggling.
Last two years has also seen hike in airport fees. There are all kinds of taxes – landing fees, parking fees, passenger fees, etc, are a burden for us. If it's a burden for foreign airlines, then we can only imagine how difficult it is for local airlines. No wonder, passengers complain about high fares.
The aviation policy should look at the potential of India and help in that direction. National airlines can make better business and policies should help them.

How do you see things changing now, with the new government?
Change is normal. We will see more carriers, that means there will be a lot more connectivity. We see a lot of interest from foreign carriers, which underlines that India is a much more important market in all its aspects. Although we complain about high airport fees, we also see some world class airport terminals.

With Foreign Direct Investment (FDI) opening up, does it make sense for Lufthansa to invest in a local airline?
That's not our business model. Our expertise is in long haul and Europe. But, we do not understand business in India, it's totally different. It's not better or worst, it's just different. You have to adapt to local set up, if you want to be successful and there we don't have enough expertise. That's very difficult. That's why we do not have any set-up outside Europe. We will rely on close co-operations and joint ventures. We have joint ventures with Air Canada and United Airlines when it comes to North America traffic out of India and then the next step is within our alliance, that is Star Alliance. We are happy with the entry of Air India very soon. That's the sort of co-operations we are looking for. Star Alliance is already 17-years old since its foundation and Lufthansa was one of the founding airlines. So, it will be a voluntary co-operation with all the airlines with 28th being Air India, and we will have lot of advantages. And not just airlines but customers will also benefit. With one ticket, they can use entire system of Star Alliance.

Do you see increasing dominance of Gulf carriers as a threat for Lufthansa?
They are growing and we have a lot of respect for them. But that does not mean we should be afraid because we feel that if you have good quality, good product, good reach, then that helps in selling your product well. We are always recognised as European airline to India. It's all about quality made in Germany.

Does more bilateral for Gulf countries bother you?
That's out of our control. We always observe, we always evaluate and see what does it mean for us and we have to change something or not. We have seen that, with the given growth in India, there is a potential for everything. We are more focused and stronger on business travelling. The others are stronger on ethnic travel or groups and commodity-like business. But that's good. We have to position ourselves and we are happy that Lufthansa is very well positioned.

What are your plans for introducing A380? Also, if you could share your expansion plans for India?
We have applied for the approval of Airbus A380 which is another very important step for us. This is in response to the growing demand in India. We are looking to get it in winter schedule, that's starting from October.
Very soon by the end of this year, we will introduce the premium economy class. There is a change in demand structure. We are very focused on business travellers and because of company policies and cost cutting programmes, a lot of companies are changing their travel policies and don't allow everybody to travel on business class. So premium economy will cater to such customers.

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