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Airline Expert Suggests Privatization Of Troubled Air India

Top Lufthansa official: Don't waste time, privatize Air India

May 23, 2011

SAN FRANCISCO, Cal. - A top global airline official has suggested privatisation of Air India saying government involvement in running airline business does not help.

Maintaining that "a lot of time" has already been lost, Lufthansa's Carsten Spohr said there was a lot of government involvement in India which "does not always help" as airline business needs quick decisions.

Referring to the privatisation experience of the premier German carrier, he said Lufthansa was partly privatised in 1992 and fully five years later.

"Our stocks were put on the market through public stock exchange and we don't have a single shareholding. The employees' unions are also our shareholders", Spohr told a team of visiting Indian journalists here.

"Coming from German history of government involvement in Lufthansa a few decades ago, we know it doesn't always help to make an airline more flexible and cash rich", he said.

Maintaining that Air India should remain a national carrier but not owned by the government, he said, "it does help to have a national attribute to the carrier. We call ourselves Lufthansa German Airlines but we are fully privatised. We can change our name tomorrow. But we don't do it. Because we believe that 'German' is something which helps Lufthansa.

"So is it the strength of an airline to be Indian? Yes. But should it be owned necessarily by government? I think the example has been proved round the world, probably its more of an advantage to have that beneficiary not to be owned by the government. But it's a question every government and every airline has to answer. In Germany , we have found an answer".

Lufthansa has been Air India's mentor, helping and guiding it complete all formalities for joining the Star Alliance, which has given July 31 as the deadline for the Indian carrier to join the global airline grouping.

About its India plans, Spohr said Lufthansa was pushing hard to launch its superjumbo A-380 flights soon from Delhi where it wants develop a hub in cooperation with Indian carriers. The German carrier has already applied to the Indian government for allowing it to operate the superjumbo.

Lufthansa is also mulling a new connection from Delhi to Dusseldorf in Germany, but details are yet to be finalised.

Spohr said "we would have put Delhi as one of the destinations when we received our seventh A-380, but could not do so. With the eighth aircraft being delivered later this year, we hope to fly it to Delhi where the new Terminal-3 is waiting to receive the superjumbo".

As soon as India gives it permission, Lufthansa could pull out one of the A-380s from the existing sectors and start operations to Delhi, the CEO said, adding that Air India "will have access to this aircraft as we have a codeshare agreement".

Top Lufthansa official: Don't waste time, privatize Air India
Lufthansa's Carsten Spohr / Image via


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