Against the background of a weakening global demand, forcing international airlines to reduce frequency and capacity for the summer schedule, Deutsche Lufthansa, Europe's second-largest transatlantic airline, is spreading its wings to potential growth markets in the Middle East and Africa.
"As a slump in economic activity continues to weigh, we are seeing the strongest decline in corporate accounts. In such an environment we are seeking for new sales channels, new customer groups and flight segments," Joachim Steinbach, Lufthansa's vice president of sales for the Middle East and Africa, told The Jerusalem Post recently in Tel Aviv. "We view the Middle East and Africa as our growth markets. In the Middle East and Africa the global economic crisis has not hit passenger traffic and capacity as much as in other areas around the world. The banking system in these markets has been less affected by the global crisis."
Last year, Lufthansa announced that it would invest euros 150 million euros into new flight launches as well as upgrading existing ones until 2013.
Following two-and-a-half years of negotiations between Israeli and German authorities, Lufthansa resumed flights on the Tel Aviv-Munich route at the end of April after a six-year break. There are four weekly flights on Airbus 340-300 planes between the two cities.
Lufthansa believes that there is ample demand for Israel as a destination, despite the economic slowdown.
"The approval of the route came at a crisis point in the economy and unfortunately we missed the winter season," Ofer Kisch, general manager of Lufthansa Israel, told the Post while flying on the relaunched route between Tel Aviv and Munich. "But every crisis comes to an end and we believe in making targeted investments of great potential which will bear fruits once the economy recovers. Good connections will be the winning card after the crisis."
The new service complements Lufthansa's double-daily service from Tel Aviv to Frankfurt, increasing its passenger capacity to Israel by 20 percent.
"In recent years I discovered that Munich has become a popular target for Israelis. At the same time, though, demand for incoming and outgoing tourism to Israel has suffered as a result of the economic crisis and Operation Cast Lead. We realize that we need to be more attractive, offering competitive prices this summer," said Kisch.
"Connecting flights to southern France are the most popular when looking at the connection network out of Munich," Kisch said. "About half of the passengers boarding in Munich are not connecting passengers, showing the popularity of the point-to-point connection."
Germany was the third-largest destination to and from Israel in terms of passenger numbers in June after the US and Turkey, according to figures provided by the Israel Airports Authority.
International passenger traffic fell 12.5% in June compared with the same month last year. The IAA attributed the decline mainly to a drop in travel to Turkey.
International passenger traffic at Lufthansa Israel was down 5.8% in June compared with last June, while passenger traffic at El Al Airlines rose by 4.2% during the same period.
Kisch added that Lufthansa was in talks with tour operators to offer attractive packages, and the airline is also planning to bring groups of German travel agents to Israel to promote the country as a prime destination for family holidays and business trips.
Munich Airport, which is considered one of the most efficient airports in Europe, is Lufthansa's second hub after Frankfurt, and offers US and European travelers, in particular from France, better connectivity options to Tel Aviv through Munich's airport.
"For the Israeli market, for example, we are considering offering flights to the US via Munich, with a stopover for a few days free of charge," said Kisch. "At the same time we are targeting the French market and Jewish communities in smaller cities such as Marseilles, Toulouse and Lyon as we can offer even better connections to fly via Munich than Frankfurt to Tel Aviv."
In addition to Israel Lufthansa has identified other destinations in the Gulf region as presenting profitable growth opportunities and has thus increased capacities on the airline?s routes to and from Oman, and Saudi Arabia.
"I still dream of a connection between Israel and Dubai," said Steinbach.
In addition, Lufthansa has over the past year expanded its services in West and Central Africa adding new destinations to its network including Malabo in Equatorial Guinea, Luanda in Angola and most recently Libreville, the capital of Gabon. With the latest addition Lufthansa currently flies to 16 destinations across Africa.
"Despite the recent economic climate worldwide, the African economies continue to reflect a healthy growth due to the fact that their internal economies are resilient as well as the high level of interest of foreign governments," said Steinbach.