Lufthansa-Air India partnership can extend beyond Star Alliance: Carsten Spohr, BA

Lufthansa and Air India are exploring opportunities to deepen their collaboration beyond the existing Star Alliance framework, Carsten Spohr, chief executive of the German airline major, told ET.

Lufthansa’s partnership with Air India within Star Alliance, the world’s largest airline network, “has been very fruitful”, he said. “However, we believe there are further opportunities to enhance our cooperation, which will benefit our customers and strengthen our market presence,” he said.

Star Alliance membership has allowed the two airlines to offer their passengers a seamless travel experience with benefits such as coordinated schedules, shared lounges, and reciprocal frequent flyer programmes, Spohr said, adding that they are now looking to build on this foundation to achieve even greater synergy.

Spohr said he held elaborate discussions with Campbell Wilson, chief executive of Air India, on the sidelines of the International Air Transport Association (IATA) AGM in Dubai earlier this month.

If successful, this move could set a new precedent for airline partnerships, demonstrating how carriers can go beyond traditional alliances to create more value for their customers and stakeholders.

Potential areas for deeper collaboration include joint ventures on India-Europe routes and coordinated marketing strategies,people aware of the negitiations said. By aligning their operations more closely, Lufthansa and Air India, which is now owned by the Tata group, aim to optimise their route networks, reduce operational costs, and offer more competitive pricing.

This initiative is expected to be particularly beneficial in tapping into the growing air travel market between Europe and India where European airlines like Lufthansa have faced tough competition from state-backed Middle Eastern carriers like Emirates and Qatar Airways that have convinced passengers to fly via their hub airports with cheaper fare.

However, a deeper commercial partnership will also depend on how fast Air India can refurbish their product, particularly the wide body aircraft which operates to Europe and North America.

The Air India CEO had previously said the airline will spend $400 million on refurbishing its Boeing 777 and 787 wide body aircraft. But the process has been delayed to next year due to global supply chain constraints that aerospace part manufacturers are facing.

Currently, Air India operates the 777s owned by Delta and Etihad, which are more premium than the airline’s original product.

Lufthansa and Air India have strengthened their relationship with a code share agreement on the popular India-Australia route.

Under this pact, passengers of Lufthansa from its hubs in Frankfurt and Munich can proceed to Sydney and Melbourne via Delhi and Mumbai on Air India.

Similarly, passengers of Swiss Airlines, owned by the Lufthansa group, from its hub in Zurich will be able to travel to Sydney, Melbourne, and Kathmandu on Air India through Delhi airport.

This is a rare occasion where Lufthansa has agreed to place its code on Air India flights for international routes.