Lufthansa wants to see its joint venture with Air China up and running by the end of this year, which will be its 89th on the mainland, says chairman and chief executive Carsten Spohr, as the world’s largest airline group looks to ward off competition from Gulf carriers by strengthening bilateral partnerships.
“Of the €30 billion turnover we make, €4 billion we make out of Asia … And out of the 240 flights we put into Asia-Pacific every week, 83 of them go to greater China, so it’s by far the most important destination in Asia-Pacific for us,” Spohr told the South China Morning Post on his first visit to Hong Kong since he took the top job in May.
But he admits the profitability of the Asian market suffers from fierce competition, especially from new players in the Middle East.
“If Dubai, Qatar and Abu Dhabi would not be between Asia and Europe, but would be an island in the North Atlantic, the high yields would be here [in Asia],” he said.
“Biggest pressure points on yields are always where overcapacity is highest – this is everything that is served by the Gulf [carriers], in particular India, Southeast Asia.”
A joint venture with mainland China’s flag carrier and largest international carrier, first announced in July, was on track to be put up as soon as antitrust government approvals were secured, Spohr said.