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Lufthansa needs a stronger Air India, says CEO Carsten Spohr

Carsten Spohr, CEO of the Lufthansa Group, oversaw the German carrier swing to a net profit of euro 1.5 billion after being one of the worst affected globally during the pandemic. The airline is now in the process of hiring 20,000 people until the end of 2023. It recently placed an order for 22 wide-bodied planes, part of an outstanding 210-plane order and will spend an unprecedented euro 2.5 billion on its product upgrade. In an exclusive interview with ET’s Anirban Chowdhury, Spohr spoke about the challenges that Lufthansa continues to grapple with, its plans to redeploy the Airbus A380jumbo jet in the Indian market, deeper commercial ties with Air India and ambitions to enhance the role of its aircraft maintenance, repair and overhaul (MRO) unit Lufthansa Technikin India.

Lufthansa has had two years of crisis and has come out a winner. But many challenges still remain: an IT outage leading to cancellation of flights, staff issues, energy costs, the Ukraine war...

We wanted to be among the top airline groups coming out of the crisis and we did. We are the number one in Europe and number four worldwide and we kept more than 100,000 employees on board. In addition to this, we managed to secure an additional 53 high-tech long-haul jets like the Boeing 787 and the Airbus A350 at competitive prices. But there are challenges all airlines across the globe unfortunately still have to deal with: infrastructure bottlenecks at airports and air traffic control, supply chain bottlenecks delaying delivery of airplanes or engines, staff shortages around the world - all this is limiting industry growth. At the same time, however, this phenomenon creates a favorable economic environment for airlines as the limited supply of flights continues to be met by a very strong demand for flights.

When will Lufthansa reach pre-Covid capacity?

We are targeting early 2025 to return to the capacity we offered in our record year 2019 but with less staff. This means that we will become even more lean and efficient in the coming years. For 2023, we are planning for 85 to 90 per cent. We will continue to stay prudent with our capacity planning, as our top priority is a stable ramp-up of operations: quality is more important than quantity. That is also why we are hiring a 1,000 people per month. We are proud to attract this number of talents as it shows the ongoing fascination for aviation and the attractiveness of our brand.

What are Lufthansa’s plans of ramping up operations in Asia? You said in the latest earnings conference call that Lufthansa will ramp up operations to China from the second half of this year. Also how much will it give a boost to your corporate travel numbers?

Japan, India and China are three of the top five economies in the world so obviously we have a strong presence there – we are the number one European airline group serving all three markets. All of them have a very high share of corporate travelers, even above the average of what we have in the Lufthansa network. We are planning to ramp up China starting in the second half of this year. We are already ramping up flights to Japan. With these corporate-heavy markets still opening and India already being open, the number of business travelers in the Lufthansa network will continue to increase. And let us not forget: Asia was first into the crisis and will be last out of it. Therefore, the region still has to return with strength and a corresponding strong demand for corporate travel. I believe that for Asia the best is yet to come.

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