‘We’re Demanding a Level-playing Field: Lufthansa Cargo Chief
India is among the top three markets in Asia-Pacific region for Lufthansa Cargo and it is seeing a gradual increase in demand, chairman Peter Gerber told Anirban Chowdhury in an interview. Even as the German freighter airline attaches great importance to India, it could do with a level-playing field and better airport infrastructure in the country, he said, pointing out that India has given undue advantages to Gulf carriers in terms of traffic rights. Edited excerpts:
Has there been an improvement in freight demand after the downturn in the past couple of years? Globally, what has really changed is that demand for air freight is back, after weak quarters last year. There is also an increasing demand in India. There is more demand than capacity and this helps yields as well.
How is the Indian freight market faring? Asia-Pacific is the most important market for us. And India is among the top three markets in this region. A place like Mumbai will have a double-digit growth. India as part of our network is extremely important for our partners in Europe and the US. And we don’t just have Delhi, we have Mumbai, Hyderabad (where we don’t fly passenger flights but only freighters) and Bengaluru. Chennai is looking like a very strong import market at the moment. We see potential in the pharmaceutical industry. We see a vibrant automotive industry that is exporting more and more. I also think there is quite a bit of growth in the garments segment, though I wouldn't call it quite as high. There are certain goods in the industry and machinery sector that would also require air freight. In India, there was a growth in demand last year as well but also a growth in capacity, which is why there was a pressure on yields. That has significantly improved now. We have seen an improvement of almost 10% on yields.
Airport infrastructure is lagging though, especially the cargo area at the Mumbai airport, which is the busiest for air freighters… The Mumbai airport is working very hard to improve infrastructure. If I could have a wish I would say yes, it should be more improved. Infrastructure has been an issue in India. It’s no secret. Mumbai needs better infrastructure as it’s the biggest cargo market. They are working on it. Could it be better? Oh, yes!
Speaking of the Gulf carriers, Western airlines have always had a grouse about the lack of level playing field. Do you think the government has been unfair in allocating bilateral rights? We share the problems of the passenger segment, that’s for sure. We are still demanding a level-playing field because there is none. They (Gulf carriers) are heavily subsidised while we have to pay taxes. It’s still a big issue. But we are doing better economically and operationally. And they have problems. Bilateral agreements that the Indian government did with the Gulf carriers are different from what it did with us. Maybe that wasn’t the smartest move. There’s practically open skies now (between India and the Gulf) and this is almost the home turf of Arabian carriers. So it wasn’t the smartest move you could do… but it happened.
PETER GERBER Chairman, Lufthansa Cargo There’s practically open skies now (between India and the Gulf) and this is almost the home turf of Arabian carriers