Lufthansa Plans 14% Growth in the Georgian Market
Lufthansa Group’s Ongoing and Expansionary Plans on the Georgian Market.
Stefan Kreuzpaintner, Sales Vice President of the Lufthansa Group in Europe, Near East and Africa, has recently paid a working visit to Georgia. In his interview for AviaNews, he talked about the airline’s plans and, in general, the ongoing and future projects of Lufthansa in Georgia.
-First of all, what was the objective of your visit to Georgia, and what meetings have you held?
-I am visiting Georgia for the first time. Before my arrival, I talked about Georgia with various individuals, and everybody showed positive attitudes towards your country. This factor proves that Georgia has a good position and huge potential.
The key objective of my visit was to expand the workload of the Munich-Tbilisi-Munich flight by 14%. We have been operating in Georgia for 14 years, and we have chosen this symbolic number. We will have 14% more seats as a result of our 14-year operation in Georgia.
Another objective was to explore the region’s internal sales – 60 people are coming from various countries to Tbilisi, as well as from the head office in Austria, Frankfurt, Zurich and they will receive due information about our sales in Tbilisi, and the whole region.
The third reason was to hold meetings with decision-making bodies in Georgia, to explore the current dynamics, which turned out positive. I have learned a lot about Georgia, about its openness, and its future plans.
-After the 14-year operation in Georgia, how content is your company with the Georgian market, especially, over the past years, when the tourist inflow has been growing?
-We are very content with the Georgian market, and we plan to increase the number of seats. We can also say that Georgia has withstood difficult times, and Lufthansa was represented in Georgia in that period, too. The tourist inflow has grown over the past period, in both directions. Moreover, Georgia has visa-free regime with EU countries, and the business dynamics grows. As a result, we plan to expand options for our clients, and we will add two new flights a week.
I believe this is an additional step towards irreversible and sustainable growth in Georgia.
-In the interim period, will the Lufthansa Group expand operations on the Georgian market, through adding new directions or involving other companies in the group on the Georgian market?
-No, at this stage we have no other plans. I believe the company should implement its plans step by step. Otherwise, we will not be able to ensure sustainable and successful operation. Therefore, I believe that 14% growth is sufficient for 2019. And based on the results, we will talk about additional steps. Thus, at this stage we have no other specific plans.
-But there were times when Eurowings could enter Georgia. Our society is interested in low-cost flights, and Wizz Air’s indicators and its passenger turnover also prove this.
-Eurowings is our Point to Point platform, and its key objective is to ensure competitive prices in the segment of low-cost airlines. Over the past 4 years, the airline demonstrates impressive growth, especially in 2018.
Along with additional growth, we should also talk about stability, and this is our key objective for 2019: to follow a reliable schedule. Therefore, we have no plans for expansion of Eurowings on the global market. I believe our homework in Georgia, for the current year, is sufficient, and we will focus on making additional flights profitable, and then we will see what happens.
We always analyze markets and markets dynamics, and only after this will we take decisions regarding any growth and expansion. Naturally, we always have long-term perspectives regarding the Georgian market, like other markets too.
-How has the visa liberalization process influenced your flights – what statistics do you have? Are there any problems in terms of border-crossing restrictions and deportations?
-After visa liberalization, over the past 2 years, visits from Georgia to western countries have been growing, including for educational purposes. At the same time, it is interesting that visa liberalization has also increased arrivals from Western Europe to Georgia. Therefore, I believe visa liberalization has brought a lot of positive results – tourist traffic has increased in Georgia, and this signifies additional development. Georgians leave for Munich or from Munich for other countries – mainly for France, Spain and the USA.
As for visitors from Georgia seeking asylum in Europe, we have no similar cases. Since we are a commercial airline, naturally, we are interested in the maximum liberal visa regime. We check documents on the border, but migration is a political issue, and we cannot make comments on this issue.
Therefore, we ask the relevant countries to check due documents on the border, because if certain documents are required, the airline is responsible to pay the costs of the return ticket. Naturally, this is the case that we want to avoid.
-Since your company has huge experience in aviation, what would you share with us from your experience, and what recommendations would you give to the Georgian airline Georgian Airways, for example, in order to become more successful?
-I can talk about the model of the Lufthansa Group. Our strategy places focus on premium segment, on the one hand, through our premium brands – Austrian Airlines, Lufthansa and SWISS. Over the past few years, we have made huge investments and we will maintain this policy to strengthen in this direction, including by the introduction of premium products. Moreover, one of the most remarkable facts is that Lufthansa is the only western European airline that has obtained 5 stars in the Skytrax World Airline Awards. Our strategy is also to maintain competitive prices in the budget segment, after we started developing Eurowings, our second platform and brand, which is the third biggest Point-to-Point airline, and which permanently grows.
Therefore, to stay successful, our business model covers both premium segments and the most important budget segment.
Several weeks ago, we declared that we plan to buy 40 airplanes to replace the existing fleet, and add new ones. We plan to buy 20 Boeing 787-9 and 20 Airbus A350-900 airplanes. In this respect, I would like to also mention the company’s corporate and social responsibility aspects, because the new airlines will, essentially, cut CO2 emissions and noise.
-Which destinations are the most loaded on the global market?
-London is one of the busiest flights in Europe, while Paris and Barcelona are one of the most popular destinations. As for international flights, New York, San Francisco are popular, as well as Shanghai in Asia.