Ferrying about 1 million passengers from the Middle East to Germany and onward in 2012, Lufthansa continues to make its mark on a region that aviation giants such as Emirates and Etihad call home. Executive sat with Lufthansa’s Carsten Schaeffer, vice president of sales and services in Southeast Europe, Middle East and Africa, to talk about Lufthansa’s success in the region.
What is the size of Lufthansa as we speak at the end of April 2013?
To do our numbers justice, I should talk about the full year 2012 in which we had 75 million passengers in Lufthansa Passenger Airlines and 103 million in the whole group, which includes Swiss International Airlines, Austrian, Air Brussels and German Wings.
If we talk about flights that originate from the Middle East and Africa, who do you see as your biggest competitors?
In Africa, Air France is our biggest competitor, mainly in the French-speaking countries. There is a bit of competition from the [United Kingdom] carriers in Nigeria, which is one of our key markets in Africa. In the Middle East region, obviously the Gulf carriers are very active. As much as we enjoy a big chunk of the traffic to the North Atlantic, they do to Asia. In Lebanon we are not necessarily in direct competition. The big-source markets in the [Gulf Cooperation Council] countries are the ones that we focus on.
Some of the region’s big carriers of today are very young airlines by comparison. Lufthansa has a long history and has operated a service to Beirut as far back as 1956. Where is Lufthansa located today in the age mix of aviation identities?
Mentally, I think we are a young airline. We keep reinventing ourselves, trying to maintain the heritage that we have and which works to our favor, and also adapting to the ever-changing aviation environment. With the challenges of the low-cost carriers in Europe and the rise of the Gulf carriers, we have to stay young. We are forced to stay on our feet and are forced to stay young. For that we are [currently] going through another reshaping and redesign of the way we do business and also the way we sell our product.
Carsten Schaeffer was in Beirut to gain an impression of the city
What is the main aspect of this redesign?
[The question is] how can we be leaner and faster in decision making and how can we adapt to the new ways of selling which are much more technology-driven? Sales in the past were often relationship-oriented. Since more and more people buy through systems, the web — our own and other websites — the technology that we apply to sales has to be as convenient and as competitive as possible — this is one of the key aspects that we focus on.
Are you working on any new additions to the selection criteria offered to online customers?
We want to change it into more of an ‘Amazon’ idea where, in a central European environment, people want to go on a city break vacation and have the desire to spend some nice time. They don’t come with a predetermined mindset as to which city they want to visit — it can [for example] be Barcelona, Stockholm or Prague — and ask for some ideas.
Would it ever be possible to have short trips to Beirut included in the suggestions for city breaks to Europeans?
One of the reasons why I am here was that I wanted to gain a first impression of Beirut. Beirut still has an image issue and I think it takes your work, my work and the work of others to educate the world about what this city has to offer. And what we know also from portals such as TripAdvisor is that nothing works better than a recommendation by somebody you trust. I personally love to eat; I love wines, and if I start recommending restaurants in Beirut and go to Beirut for dining out, friends who have similar requirements will start following that advice.
What do you see as your competitive edge in appealing to international passengers?
We will never be Asians in the way we perform service but what I always enjoy when I fly Lufthansa is the way in which the crew treats me as an individual, holds a conversation and presents a European lifestyle when it comes to knowledge of the wines they are serving or the kinds of foods. Other companies in our field struggle with not having a heritage and infuse little things to create something like a heritage through the look and feel [of their products]. Let’s say we are intrinsically German and we don’t need an additional list of languages that we offer. We offer English, German [and other languages], but that is something that you can always rely on.
When it comes to onward passengers, transit visa requirements in Germany have always struck me as obsolete and perhaps uselessly stringent. Is that an issue for your Middle Eastern business?
We wish that European governments would create friendlier environments for the airlines and the transit visa issue is very close to our hearts because it restricts our capabilities in the market. As we discussed this here earlier [in today’s staff meeting], I realize how difficult it can be if you need a visa. In the markets that I am responsible for here in the region, a lot of nationals have these kinds of problems.
But why is it that Lebanese need a transit visa when flying via Frankfurt for example to the United States? In other European airports, such as Amsterdam, London or Paris, they don’t need a transit visa.
I don’t understand the logic behind it but we have to abide by the local rules. We talk to the German government and the response is that there is a persistent procedure in all the Schengen countries. That is not necessarily our experience, and we would love to change that.
How about long-term labor costs? Do you feel disadvantaged vis-à-vis Gulf carriers?
We work in a different environment when it comes to labor; unionized and non-unionized is a different equation. At the same time, Lufthansa has always enjoyed very loyal staff, which is to our benefit because we believe in experience and practice in the servicing field. It is part of our success model over time. Since we are going through structural changes, there will be situations where it will be more difficult to explain to the staff in which direction we are going, but that is only a phase in time and I am not concerned in the long run.
Did the mess surrounding the Berlin Brandenburg Airport and the extreme delay in its opening cause a headache for you?
We built our schedule around the capacity of the new airport and started a lot of new destinations where we are also depending on transferring traffic. Berlin’s Tegel Airport is great for local traffic but it is definitely not the gateway where you can transit. We have operational issues in Tegel and we don’t have the transfer passengers, which affects our bottom line tremendously.
Berlin to Beirut was one of the new routes that you created in time for the new airport’s expected opening in June 2012. Was there an impact on Beirut traffic and what is your ambition for the connection between the two cities?
We saw an impact on Beirut [traffic] but even more so in central European flights that now connect through Tegel instead of the new airport. For now, we rely more on the Lebanese market to Berlin than the Berlin market to Lebanon but with more good news in German and central European media about Lebanon, we would love to have a more balanced exchange on both ends, and that is what we are fighting for on all levels.