Lufthansa sets sights on Thailand as expansion takes off
The Lufthansa Group is focusing on expanding its operations in Asia and Thailand, while also diversifying into non-airline businesses.
Carsten Spohr, chief executive of the group, highlighted that Thailand is not just a tourism hub but also a lucrative business destination. The demand for cargo from Thailand is rising, and the Asia-Pacific region is the fastest-growing market for maintenance, repair, and overhaul (MRO) services.
Lufthansa Technik, which currently serves the Royal Thai Air Force, is seeking new partners in the MRO sector.
Bangkok is a key destination for Lufthansa’s airline business, with over 10,000 seats offered weekly across 27 flights from European hubs, including a new service from Rome via ITA Airways, in which Lufthansa holds a 41% stake. Around one-third of passengers travelling to Bangkok connect to other destinations in Asia.
To meet the high demand during the Songkran holiday in April, Lufthansa has extended its Airbus A380 services from Munich to Bangkok by an additional month.
The airline also plans to operate A380s on this route during the winter schedule starting in October. The new Lufthansa Allegris cabin design is set to be introduced on long-haul flights to Thailand next year, following its rollout on routes to Shanghai and Mumbai.
Currently, passenger revenue from Asia accounts for approximately 14% of Lufthansa’s total operations, while cargo revenue from the region stands at 42%.
A significant challenge for European carriers, including Lufthansa, is the closure of Russian airspace. The group hopes for the reopening of this airspace to streamline operations in northern Asia.
Optimistic outlook
The global aviation outlook for Lufthansa Group is optimistic, with strong forward bookings and increasing travel demand. The group is investing in aircraft upgrades and services to position itself as a premium European airline.
A new first class has been introduced, and a Swiss Air first class is planned for later this year. There is a trend of leisure travellers booking premium seats more than before the pandemic, while corporate travel remains less frequent.
Lufthansa Group anticipates double-digit growth in capacity by 2025, driven by ITA Airways and other carriers. The group’s fleet will expand with over 100 new aircraft, including contributions from ITA. Frequent flyers can now earn status points with ITA, and codeshare flights are set to be available for booking.
Lufthansa agreed to acquire a 10% stake in Air Baltic, which will serve as a wet lease provider to address aircraft shortages. The group aims to achieve a turnover of over 40 billion euros (1.43 trillion baht) by 2025 and plans to modernise aircraft with a budget of up to 4 billion. Lufthansa will be the first to operate a Boeing 777X in 2026, reported Bangkok Post.
Airfares are expected to rise due to strong demand and limited supply. Increased taxes and regulatory costs, particularly in Europe, will also contribute to higher expenses.
Lufthansa imposes an environmental surcharge on flights out of Europe and uses a 2% blend of sustainable aviation fuel for EU departures. Approximately 4% of passengers opt for a green fare to support sustainable travel.
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