Lufthansa to invest $10 million to hike share in India tourism
Lufthansa to invest $10 million to hike share in India tourism
NEW DELHI (Reuter): Germany's Lufthansa Airlines, seeking to increase its hold on India's burgeoning tourist market, will invest US$10 million to promote the local travel industry, an airline spokesman said on Saturday.
He said Lufthansa chairman Juergen Weber, who accompanied German Foreign Minister Klaus Kinkel to New Delhi last week, told Indian officials the airline saw an increasingly important role for itself in the domestic market.
Weber, on his second Indian visit in three months, believed Lufthansa could work with state-owned Air India to increase tourist inflow from Germany and other European countries.
"A new Indo-German bilateral... would enable us to increase our flights to India and launch, jointly with Air India, our Tourism Development Fund to increase the flow of German tourists to the country," Lufthansa spokesman Kavin Sethi quoted Weber as saying during his recent visit.
Germany is among the few countries to have been allowed to bring in more flights. Some 40 countries have requested additional landing rights in India.
Sethi said Lufthansa had committed $10 million in the bilateral agreement with Air India to launch the fund to market India as a tourism destination in Germany.
The fund, to be administered by representatives of the two carriers and the Indian government, will be created and maintained from money Lufthansa will pay Air India for ferrying passengers to and from India.
Sethi said Lufthansa's investments would be stretched over a five-year period.
Aviation industry sources said the Indian government had asked Lufthansa to contribute to the fund what would normally have been Air India's share in the profits.
"But Air India lacks the resources to fly to Germany, not having enough aircraft," an aviation industry analyst told Reuters. Sethi declined to comment.
China
Sethi said apart from India, Lufthansa was eying China as another major booming market.
"No international airline could afford to overlook these two countries," he said.
Lufthansa began a new flight to Frankfurt from the southern Indian city of Madras in July and may soon start another to cope with high passenger traffic.
Weber said the German carrier was also considering a new tie- up with ModiLuft, one of the four big Indian private airlines. ModiLuft has a technical and training agreement with Lufthansa. Its aircraft are on lease from Lufthansa.
ModiLuft is not yet a scheduled airline.
Weber said that once the government decided to ease restrictions on private airlines, Lufthansa could opt for an equity stake in ModiLuft. He did not give details.
India allowed private airlines two years ago as part of its far-reaching economic reforms, but it has yet to accord them the same status as its state-owned domestic Indian Airlines.
Lufthansa's new bilateral agreement with Air India earlier this year allows it to increase its weekly flights to 15 from the present 10. Madras was the first stop the airline chose.
"We have a load factor of 68 percent on our new flight from Madras, which is more than we expected," Sethi said.