German aviation group Lufthansa Group is banking on aviation growth in Asia and Thailand to expand its flights, in addition to non-airline businesses.
"Thailand is not only a tourism destination, but also a very interesting destination for other elements of business," Carsten Spohr, chief executive of Lufthansa Group, told the Bangkok Post.
Mr Spohr said cargo demand out of Thailand is increasing, while Asia-Pacific is the fastest growing market for maintenance, repair and overhaul (MRO) activities.
He said the group is looking for new customers or partners for its Lufthansa Technik MRO business, which now serves the Royal Thai Air Force.
For the group's airline business, Bangkok is the destination with the largest number of flights in Asia, with more than 10,000 seats a week from up to 31 a week operating from its hubs in Europe, including the recent addition of Rome via ITA Airways, a company in which Lufthansa has a 41% stake.
Roughly one-third of passengers on flights bound for Bangkok transfer to other domestic destinations as well as cities elsewhere in Asia.
Lufthansa has extended its double-decker Airbus A380 services from Munich to Bangkok for an additional month to cover the Songkran holiday period in April due to robust demand.
The airline also plans to fly A380s on this route during the winter schedule from October, he said.
The new "Lufthansa Allegris" cabin design in new aircraft serving long-haul flights should be introduced in Thailand next year, having been rolled out on flights serving Shanghai and Mumbai.
Passenger revenue in Asia contributes roughly 14% of total operations at present, while the region's cargo revenue accounted for 42%.
Mr Spohr said the ongoing challenge for European carriers expanding in Asia is the closure of Russian airspace.
"Depending on talks between the US, Russia and Europe, we hope the Russian airspace will be reopened, allowing us more efficient operations into northern Asia, where we are currently circumnavigating and experiencing delays," he said.
PREMIUM AIRLINES
On this year's global aviation outlook, Mr Spohr said the group is optimistic about the sector, considering healthy forward bookings and robust travel demand, aligned with existing demand to spend more time travelling post-pandemic.
It is also investing in upgrading its aircraft and services to position airlines in the Lufthansa Group as premium European airlines.
Lufthansa has already introduced a new first class, representing the first upgrade in a decade, and there are plans to launch a new Swiss Air first class later this year.
He said all airlines in the group have witnessed more leisure travellers booking premium seats than prior to the pandemic, confirming their willingness to spend on experiences compared to the still lower share of corporate travellers.
"We see that people like to buy German cars and Swiss watches. Lufthansa Group combines both," he said.
In 2025, Lufthansa Group expects at least double digit growth in terms of capacity or seat kilometres, with ITA Airways alone driving more than 10% growth, while other carriers should achieve 5% growth.
On top of the group's existing 730 aircraft, over 100 more aircraft will be added to the fleet via ITA.
The recent integration of ITA Airways into the group means Lufthansa's frequent flyers can now also earn status points when travelling with ITA.
Its first codeshare flights for the summer schedule were scheduled to be open for bookings by the end of February.
The group will also optimise operations between its hubs in Italy, Germany, Switzerland and Austria this summer.
As the group has also agreed to acquire a 10% stake in Air Baltic, Mr Spohr said the airline will serve as a wet lease provider, helping to fix aircraft shortages this summer due to Pratt and Whitney engine issues.
Lufthansa Group is planning to make over €40 billion (1.43 trillion baht) turnover for the first time in 2025. It also plans to allocate a budget of up to €4 billion for aircraft modernisation, as 26 new aircraft will arrive this year.
Lufthansa would also be the first airline to utilise a Boeing 777X in 2026.
Mr Spohr said airfares would likely rise, attributed to very strong demand, amid limited supply due to a lack of aircraft.
Rising taxes and regulatory costs, particularly in Europe, would also push up airlines' expenses.
For all flights out of Europe, Lufthansa is subject to an environmental surcharge. To cover the regulatory costs, the group uses a blended 2% sustainable aviation fuel for departures from the European Union.
Roughly 4% of Lufthansa's passengers voluntarily choose to book an additional "green" fare to support sustainable travel initiatives, he said.
