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Indo-German civil aviation are on a high
© Fraport AG
Indo-German ties touch the skies

May 29, 2008

The Indian civil aviation industry has got wings, literally! And Germany is partnering India in striving to become a global civil aviation hub.

From helping modernise airports to providing technology and infrastructure for their smooth running, from starting new flights and routes to India to assisting Air India in choosing a second European hub, Germany has become an important partner in the Indian aviation industry.

During 2006-07, total passenger traffic grew at 27.2 per cent and the aircraft movement increased by 27.5 per cent, according to Government of India estimates. The domestic air traffic is expected to grow up to 180 million and international traffic to 50 million passengers by 2020.

German companies providing infrastructure

As India looks to providing world-class facilities to world travellers, German companies are playing their role in this modernisation. The first phase of the modernisation of Delhi & Mumbai airports, likely to cost €7.7 million, is expected to be completed by 2009. And Fraport, Frankfurt-based international airport operator, has a 10 per cent stake in the GMR-led consortium involved in the modernisation of the Indira Gandhi International (IGI) airport in Delhi.

The newly-opened Bangalore airport too has a German connection. The holding company for the project, Bangalore International Airport Limited (BIAL), is a consortium of Germany’s Siemens Projects Ventures, India’s Larsen and Toubro Ltd, and Unique Zurich Airport. The Siemens Industrial Solutions and Services Group and Siemens Ltd India are equipping the airport with technical systems.

The recently opened GMR Hyderabad International Airport (GHIAL) signed an agreement with Munich Airport International (MAI) for the period August 2006 to May 2008 to facilitate the transfer of operations from the Begumpet airport to the new airport with precision. Apart from this, Germany’s Siemens IT Solutions and Services will supply the entire operational testing and commissioning (OT&C) infrastructure and will now operate it for three years.

As India expands its plans to modernise over 80 airports, German firms are ready to become India’s partners in this field. Fraport has already announced plans to seek partnerships with Indian companies to hold 26 per cent stake in future airport projects in India. The company has expressed interest in development prospects in Goa and Gujarat. In June 2007, Fraport signed a Joint Venture agreement with real estate group DLF to make fresh forays into airport modernization. A special purpose vehicle has been set up, DLF Fraport SPV, to focus on the development and management of airports in India.

Indo-German bilateral talks

In April 2008, India and Germany held the latest round of Indo-German civil aviation negotiations in Berlin. Talks held between April 9-10, have substantially enhanced air connectivity between the two countries and widened the scope of cooperation in the civil aviation sector.

Under the agreement, the number of flights which market leader Lufthansa will be able to operate per week has been increased from 50 to 69. Additions include a new daily service from Munich to Mumbai, a business-jet connection from Frankfurt to Pune (six flights per week). The existing service to Kolkata will now be provided on a daily basis. Lufthansa's sister company Condor also intends to fly to Goa twice a week.

Says Lufthansa Director for South Asia, Werner Heesen, “India is one of Lufthansa’s strategic growth markets in the Asia-Pacific region. The capacity has more than doubled in the last five years from 23 flights in 2003 to 55 flights in 2008. We have also expanded our network to seven cities in India – Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Kolkata and Pune - to our three hubs in Europe – Frankfurt, Munich and Zurich.”

From Winter 2009-2010 onwards, two other German carriers, AirBerlin and LTU, plan to enter the market and offer daily services to Delhi, taking the total number of flights from Germany to India to 76.

The next round of negotiations is scheduled to take place in February 2009. Among others, talks are expected to consider further expansion of frequencies to meet the fast growing demand generated by the booming Indian economy, as well as operating permits for the new Airbus A380, which Lufthansa plans to fly to Delhi and Mumbai by 2010.

Lufthansa in India

Lufthansa made an entry into India as early as 1934. It eventually began its first scheduled operations to Kolkata in 1959. Over the years, Lufthansa has become a leading European airline in India, serving seven destinations.

The European airline also has a special cooperation with Air India. From 2002, codeshare flights were operated by Lufthansa, carrying Air India flight numbers. A Memorandum of Understanding (MoU) was signed in August 2003 to establish broad-based strategic cooperation in various fields including engineering, commercial and IT services. An official codeshare agreement was signed in August 2004. Currently, more than 350 weekly joint flights are operated to and from six destinations in India and 12 destinations in Germany, Europe and the US.

India’s national airline, Air India, has also been approved to join Star Alliance, one of the leading groups of international airlines, as a part of its global expansion plans.  In May 2006, Lufthansa also formed a reciprocal Frequent Flyer Partnership with Jet Airways.

Air India plans new European hub

State-owned Air India is also working and negotiating with Lufthansa to establish its second European hub. Reports suggest that they may decide in favour of having two airport hubs in Germany -- one at Frankfurt and another in Munich.

Air-India plans to use the Frankfurt hub for its flights to the US originating from Mumbai and New Delhi. It intends to use the passenger traffic from US flying into Frankfurt as a feed for the afternoon flights back to India. The airline currently operates daily flights to Frankfurt.

While talks are still on and a decision yet to be made, Lufthansa says they would support Air India in whatever they choose. “We have made our proposals and now it’s for Air India to decide. But we would support them in every possible way,” says Heesen.

India is a promising economy and German investments in India are in the fast lane. “Lufthansa is continuously evaluating opportunities in India and plans to grow as the market expands and infrastructure is provided,” concludes Heesen.

by Sakshi Arora
© German Information Centre New Delhi
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