Going against the grain – an interview with Axel Hilgers Lufthansa’s Director South Asia

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Last Tuesday, I had the opportunity to interact with Mr. Axel Hilgers, Director South Asia for German carrier Lufthansa, which was recently voted by CNBC as the best foreign airline in India.

I began by asking him about Lufthansa’s newly launched 44 seat all business class Boeing 737 Business Jet (BBJ) service between Mumbai and Munich five times a week, which seemed to be against the grain given the global economic slowdown and corporate cost cutting.

He informed me the new service was a build up on their identical six times a week service between Pune, the automotive capital of India, and Frankfurt. Pune is home to Mercedes Benz, Volkswagen and 200 other German companies in India.

Said Hilgers

“Even in recession there is a need for business people to travel”

Lufthansa has a good experience with it’s Pune flight. Despite the global trend of decline in premium class passengers, the all business class BBJ is an exclusive product offering competitive fares and great convenience, resulting in high passenger load factors, which has encouraged Lufthansa to launch this second service between Mumbai and Munich. At Mumbai the exclusive service levels are raised even higher with Lufthansa’s exclusive premier lounge.

Lufthansa though, has undertaken “intelligent capacity adjustment” on its 54 weekly flights to seven destinations in India. For example, the existing Boeing 747-400 service between Mumbai and Frankfurt was a 16 seat first, 80 seat business, 234 seat economy. After the introduction of the BBJ, the 747 has been re-configured to 16F/66J/270Y seats. Lufthansa group member SWISS offers and additional ten weekly flights to Zurich.

“India is a focus market and we are committed to India long term, but also, we are flying to earn money and make a profit. We plan and make intelligent adjustments based on commercial logic as needed”

declared Hilgers.

The United States is the destination of choice for most passengers from India and there are three competitive threats to European carriers:

• Huge growth of Gulf carriers, most notable Emirates in the Indian market.
• European airports are ageing While Asian and Gulf hubs are putting up swanky new terminals to encourage transit traffic
• Non stop flights by Air India, Continental, American, and Delta

In Hilgers opinion, just like India, passengers to the US prefer direct connectivity to their destination and also prefer not to connect via a domestic carrier (could be due to the dropping service levels).

Lufthansa serves 19 destinations in the US. Both the gulf carriers and the non-stop India-US flights, still serve only coastal cities New York, Washington DC, San Francisco, Los Angeles, Houston, and even on the India side, the non-stops only serve Mumbai and New Delhi.

Lufthansa has a 40% stake in the Munich hub, which has been voted three times as the best airport in Europe, and is strengthening its presence there. Lufthansa has given up many of it’s administrative buildings at Frankfurt airport which too is expanding with the addition of a fourth runway. Lufthansa believes that it’s passengers prefer a quick, smooth, nice and hassle-free transfer within one and a half hours to arrive at their destination fresher, instead of waiting three or more hours or indulging in extensive duty free shopping.

About the two biggest Indian airports Delhi and Mumbai, Mr. Hilgers felt transit facilities were not ideal, due the international and domestic terminals being separated and on opposite sides of the airport requiring a long drive through challenging road traffic. He is confident of the future however, and happy the both airports are undertaking upgrades and improvement which should bring them up to international spec soon.

He has praise for the airports at Bangalore and Hyderabad and says the processes are smooth and quick. While both airports are deserving of the praise, in my opinion, they still lack key facilities like shower facilities and transfer lounges, which will take their international to domestic transfers experience, from decent to great.