‘We’re De­mand­ing a Level-play­ing Field: Lufthansa Cargo Chief

The Economic Times - - Companies Pursuit Of Profit -

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

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