Cape water crisis not impacting its business - Lufthansa CEO | Fin24
 
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Cape water crisis not impacting its business - Lufthansa CEO

Feb 01 2018 22:00
Carin Smith

Cape Town – The Cape Town water crisis has certainly not created any slow-down in business for the Lufthansa Group, chair and CEO Carsten Spohr told Fin24 on Thursday.

Spohr sees Cape Town as an example of the group’s recent success and growth. The group’s capacity to the Mother City more than doubled since 2016 with brands like Lufthansa, Edelweiss, Eurowings and (in future) Austrian Airlines, offering direct flights.

He is confident that the water problem will be solved and will not impact tourism to the city and region, despite the crisis currently making international news.

The Lufthansa Group had a record year in 2017. For the first time it transported more than 130 million passengers globally. It was also awarded the highest 5-Star Airline rating by SKYTRAX, the international air transport rating organisation. It got 50 new aircraft last year – about one new aircraft per week - and plans to hire 8 000 people in 2018 – also a record. Furthermore, its share price tripled over the last 18 months.

SA is about 1% of the Lufthansa Group's global aviation revenue. It is estimated that Lufthansa transports about 17 000 passengers per week from SA and about 1 300 people are employed by the group in SA.

"We have already celebrated 55 years in SA. We are committed and believe in the SA market. Commitment to a market is more than just about business. Success must be built on the triangle of good relations with costumers, with staff and with shareholders. We have also now added a fourth element, namely community involvement and support-a-school in Cape Town," said Spohr.

He explained that in the mature market in which Lufthansa operates, the biggest growth opportunity lies in leisure markets. That is one of the reasons for the growth of low-cost airlines in the world.

South Africa

The SA tourism sector remains one of the key aspects of interest to the Lufthansa Group, according to Spohr, especially since it has also seen increased interest from SA tourists travelling to Europe.

According to Dr André Schulz, Lufthansa's general manager of sales in Southern Africa, Cape Town is booming from a tourism point of view, offering value for money. At the same time, Johannesburg is established as a commercial hub.

Spohr said SA's economy is dependent on air travel and needs a strong national airline, in his view. He emphasised, however, that Lufthansa has no plans to get involved in SAA, for example.

SA is Lufthansa Group's top destination in Africa, followed by Nigeria.

Africa

Regarding African aviation, Spohr said that, due to Lufthansa taking over the remaining shares of Brussels Airlines - which has been a specialist in West and Central Africa - the group has added 17 new destinations to its Africa network to total 35.

Furthermore, Lufthansa's technical division offers services to more than 100 airlines in Africa. Lastly, the cargo component in African aviation is another important business sector for the group.

In Spohr's view, it would benefit the African continent if countries would actually implement an open skies policy. African countries would then allow their airlines to fly to and from each other without restrictions. He pointed out that this policy has been a great success in Europe.

"Yes, there will be winners and losers, but it will be a hugely efficient accelerator for the aviation industry and for passengers on the continent," said Spohr.

"I believe we will be growing faster to and from Africa than in the rest of the world, because the continent is one of markets with the most potential."

He emphasised, though, that should aviation pick up in Africa, much more investment would definitely be needed in infrastructure on the continent.

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lufthansa  |  aviation  |  drought  |  water crisis  |  airlines
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