Sky without "grey clouds" for German giant - Lufthansa holds third of air transport market in Serbia

If you have ever wondered what can a company do in one day, the Lufthansa Airlines Group has given an answer to that question. Within only 24 hours, this company lifts about 700 airplanes in the air, operates over 2,500 flights, transports 250,000 passengers, and prepares about 1,090,000 meals. About half a million people from Belgrade alone decided to fly with this airline in 2011. Swiss International Airlines and Austrian Airlines are also part of this group operating in Serbia.

In an exclusive interview for eKapija, Lufthansa Group Director General for Central and East Europe Ofer Kisch and Director General of Lufthansa, Swiss and Austrian for Serbia Elmar Erger speak about the strategy for the future, the management's global decision to freeze investments and its impact on operations in Serbia, and the possibility of us seeing the biggest civilian airplane Airbus A380 at the Belgrade airport.

Holding one third of the market

Although the air industry failed to stay immune to the global economic crisis, which caused a drop in business results of most of its competitors, Lufthansa Director for Serbia says that they are extremely satisfied with the operations in our country, particularly because they are the largest international company operating flights from Belgrade.

- We are satisfied with our position in the Serbian market. Namely, we will set a record in 2011 by transporting the biggest number of passengers from Serbia ever. It means that we hold about third of the Serbian air transport market – says Elmar Erger.

(Elmar Erger)

As they explain for eKapija, Serbia is a growing market of the Lufthansa Group in Europe. With additional flights they operate from Belgrade, the company has managed to increase the passenger traffic by 15%, which concretely means that the number of transported passengers from Serbia will reach 500,000.

Strategy for 2012

Given that researches show that the air industry in Serbia follows a global trend, meaning that it is on a downward trend in 2011, Lufthansa primarily plans to keep its current market share in the following period.

- Of course, it would be good for us to increase that share as well. Our strategy for Serbia is to focus a bit more on business passengers (business class) by improving our services both during the flight and on the ground - says Erger.

Investment freezing

Only few weeks ago this German air transport group made a decision to freeze investments in operations for the period of six months in order to alleviate the growth of financial expenditures. It was announced on that occasion that there would be no investment in any subsidiary of Lufthansa, and that money would only be spent on the airline fleet and exploitation costs. As they pointed out, this measure will not affect the order placed for 202 airplanes worth a total of EUR 19 billion, which should be delivered until 2018.

The question is how this decision affects the company's operations in Serbia?

- Just like all other companies, we occasionally have to revise our investment policy. That is what we did for the next year since we noticed some "grey clouds" in the global economy. On one side, we wanted to be cautious. On the other side, we have a clearly defined investment program. Of course, we are completely aware on the global level that the success in every business, including ours, depends on the passengers' satisfaction. And that satisfaction depends on investments in new engines, new services - Lufthansa Director General for Central and East Europe Ofer Kisch says for our web portal.

(Ofer Kisch)

However, Kisch stresses that this global decision will not affect Serbia, explaining that passengers will not notice this cut in investment.

- What we are trying to do is to make savings by reducing the costs of procedures and structures. At the same time, we are investing in new airplanes, new seats, new look of the interior. For example, passengers flying from Belgrade via Frankfurt to Singapore will not notice any effect of our decision to freeze investments – Kisch adds.

As we learn, Lufthansa will equip 180 airplanes on continental flights with new seats by the year's end.

People at this company say they are satisfied with the operations of earlier acquired companies Austrian Airlines and Swiss International Airlines, adding that it is not a secret that they are trying to use that advantage and strengthen the synergy resulting from the fact that they own all three companies.

Although it is among the world's biggest companies in the field, it seems that there will be no new acquisitions by this German giant, at least in the following period.

- Over the last 10 years Lufthansa has been working a lot in the field of acquisitions. Major share of our investment has gone to new markets. Now is the moment when Lufthansa must take a small break to develop its operations and improve the potentials of all acquisitions it has been making over the last decade. We will, of course, try to make a profit in the process.

The world's biggest civilian airplane

Lufthansa is currently implementing the biggest fleet renewal program in its history, involving the procurement of over 200 new airplanes worth EUR 19 billion. This includes an order placed for 17 airplanes Airbus A380, 8 of which have already become part of Lufthansa's fleet. This airplane is known as the world's biggest civilian airplane.

The company uses Airbus A380 airplanes to operate flights to Tokyo, Beijing, Johannesburg, New York, Miami, and Singapore.

Kisch says he is constantly asked whether such airplane will some day take off from the Belgrade airport, but his answer is always - no, because such big airplanes will never be used on such short European routes.

(Jelena Djelic)