The Lufthansa Group and Air India have announced a significant upgrade to their existing strategic alliance, which will greater align Lufthansa’s group of airlines and Air India and Air India Express.
The agreement is specifically designed to capitalise on new growth opportunities arising from the recently concluded free trade agreement between India—the world’s most populous country—and the EU. The EU states are India’s largest trading partners for goods. Bilateral trade in goods currently totals €180 billion per year. Both economic powers account not only for a quarter of the world’s population, but also for a quarter of the world’s gross domestic product (GDP). The latest agreement creates nothing less than the world’s largest free trade area.
The agreement is specifically designed to capitalize on new growth opportunities arising from the recently concluded free trade agreement between India—the world’s most populous country—and the European Union (EU). The EU states are India’s largest trading partners for goods. Bilateral trade in goods currently totals €180 billion per year. Both economic powers account not only for a quarter of the world’s population, but also for a quarter of the world’s gross domestic product (GDP). The latest agreement creates nothing less than the world’s largest free trade area.
Lufthansa Group CEO and Chairman Carsten Spohr, said: “Today’s agreement with our long-standing Star Alliance partner Air India is a strong signal of our mutual determination to open a new chapter in aviation between the EU and India following the landmark trade agreement between both economic regions. Together with Air India, we will strengthen our access to the aviation market with the highest growth rates worldwide. The Lufthansa Group is already the most successful and most popular European airline group among customers in India. In the future, we will contribute to deepening economic and cultural relations between India and Europe with even more connections. With our new long-haul aircraft and Lufthansa Allegris and SWISS Senses on board, we are offering a significantly improved premium travel experience in all classes on more and more routes, including to India.”
Campbell Wilson, Chief Executive Officer and Managing Director, Air India: “This milestone in our deepening relationship with the Lufthansa Group is great news for travellers and enterprises alike between India and Europe. As Air India continues to expand its global footprint with a fast-modernising fleet and transformed product and service offerings, this framework enables us to explore closer cooperation on multiple fronts to meet the growing trade, commerce, and people-to-people ties between our respective regions. This would unlock greater value for our common customers and respective shareholders, and we look forward to progressing these initiatives together with the Lufthansa Group.”
The immense growth of the Indian aviation market with a rapidly growing and affluent middle class offers enormous potential. Routes between the European home markets and India have already become the second most important premium market for long-haul flights for the Lufthansa Group after the USA. Deepening cooperation with Air India, the country’s largest long-haul airline and a long-standing partner of the Lufthansa Group, opens up additional growth potential for both partners.
Currently, the Lufthansa Group airlines and Air India offer codeshare flights on 146 routes to 22 countries. The joint network comprises 15 Indian and 27 European destinations. Lufthansa offers its customers the most connections to India from Frankfurt: to Delhi, Mumbai, Chennai, Bangalore, and Hyderabad. From the 5-star hub Munich, Delhi, Mumbai, and Bangalore are served. While SWISS flies from Zurich to Delhi and Mumbai, ITA Airways connects Rome with Delhi. This means that the newest member of the Lufthansa Group, ITA Airways, is also part of the Memorandum of Understanding. This extensive offering is complemented by Air India with long-haul connections from Delhi to Frankfurt, Zurich, Vienna, and Milan as well as from Mumbai to Frankfurt.
The Memorandum of Understanding signed today focuses in a first step on expanding and jointly marketing flight offerings with the goal of providing customers with a better connected and seamless travel experience between the Lufthansa Group’s home markets—Germany, Austria, Switzerland, Belgium, Italy—and India. A second step envisions incorporating the remaining EU countries and the Indian subcontinent. The exact scope, including specific routes and markets, will be determined following the completion of the commercial Joint Business Agreement, subject to required regulatory and antitrust approvals.
Looking ahead, the co-operation is to be expanded in several areas, particularly regarding the customer travel experience. The focus will be on further co-ordination of flight schedules and route networks in selected markets so that passengers can benefit from better connections and shorter transfer times. In addition, both partners want to combine their sales and marketing activities for flights between the Lufthansa Group’s European home markets and India, better integrate frequent flyer programs, and optimize airport processes for improved customer comfort.
