Lufthansa Bullish On Asia In Medium-Term

Lufthansas Asian business is expected to be sluggish this year, but the airline is largely unaffected by the regions currency crisis and was bullish about the region in the medium term, Lufthansa executive vice-president Stefan Pichler told a news conference here yesterday.

Only about 4 per cent of our worldwide revenue comes from Asia-Pacific. So a downturn does not affect us much, he said. The Asian crisis could eventually spell an opportunity, he said.

We are rather bullish on this region. In the medium-term, there will be a huge export potential from these countries. Lower currencies will also draw a large amount of tourist traffic from Europe and North America, he said. The alliance with Singapore Airlines will become operational from July this year, he added.

 

Singapore generates only 7.7 per cent of Lufthansas Asian revenues, behind Japan (24.5 per cent), India (14.9 per cent), China (11.2 per cent), Hong Kong (10.8 per cent) and Thailand (9.2 per cent). Pichler said Lufthansas worldwide revenues in 1997 were 15.2 billion DeutscheMarks ($8.4 billion), up from 13.7 billion Deutsche marks in 1996. He said Lufthansas growth prospects in 1998 were limited as its capacity growth was limited. We expect to increase our operating profits in 1998 by cutting costs, Pichler said.

Lufthansa was adding long-haul capacity which would keep total capacity growth low, he said.