The CEO of the Lufthansa group, Carsten Spohr (Wanne-Eickel, 1966), claims to be in a good mood. After having closed a summer of record results, Europe's leading airline holding company expects a great year driven by high demand to fly – it will present results on March 7. With this optimism, the manager visited Barcelona this week, where the company has one of its largest technology centers. Lufthansa suffered a ground staff strike in Germany this week, which has now ended.
They have not yet reached pre-pandemic capacity. Will they do it this 2024?
For Lufthansa, quality and stability are more important than growth. As an industry, we still do not offer our customers the quality we want. Therefore, rather than growing blindly, it is important to stabilize the system to provide a more consistent service. There are markets in the world in which we have already exceeded our 2019 production, such as Spain.
In any case, does the high demand to fly continue?
If the demand for 2024 was below that of 2023, I would not be in a good mood, as I am now. I would not travel to Barcelona, but would be in my office with my finance team. We are once again facing a good year and Spain is one of the markets that is fueling this optimism.
What plans do you have for Spain?
As I said, we are already above 2019 passenger capacity here and we will increase it by 16% for the summer season, with 8% more flights [they will operate with larger planes]. This represents 1,317 connections per week. Spain has been a success story for us. There are only two countries in Europe where we fly to more destinations than our home country, Germany, and one of them is Spain. We have 18 destinations here and we are experiencing very dynamic growth. We are by far the number one in Palma de Mallorca, with 500 flights every week to 26 destinations. The second most important Spanish destination for us is Barcelona, where we currently operate 210 weekly flights.
How do you see the business travel segment?
Leisure travel is recovering much faster than business travel around the world. This is a challenge for an airline like ours, which has historically been very strong in corporate travel. We are reacting by moving our capabilities to those markets where there is more leisure travel. We have halved flights between Berlin and Düsseldorf, but we have doubled our flights to the Greek islands or the Spanish islands. This shows that Lufthansa is reacting to this new demand structure and we are finding new destinations. We have even created an airline for leisure travel, Discover, which does nothing but fly where we see strong tourist demand.
In Barcelona there is an intense debate about the possible expansion of the airport. What do you think?
I have great concern for the next generation of airline managers, of passengers, of the European economy that depends on aviation. It is we who are left behind as Europeans in other parts of the world. That is why, as a proud European that I am, I always support the expansion of aviation infrastructure. Europe needs to maintain its competitiveness in the sector. The Lufthansa group is the fourth in the world after the three large American airlines and the first in Europe. And my two great competitors in Europe also play in the most important league globally. If we want to maintain our position, we need infrastructure, we need the regulatory environment coming out of Brussels and our own capitals, whether it's Madrid or Berlin, to make sure that we can maintain European competitiveness in a global market. So the expansion of an airport in Barcelona is an important small part of this too.
The price of airline tickets has risen a lot in the last two years. Will flying become more and more expensive?
Before Covid, everyone complained that flying was too cheap, that we did not have adequate prices to value the importance of our service and also to reflect the impact on the environment. Now the market has normalized and I don't see big changes in the future. Costs are increasing due to environmental issues, such as CO₂ certificates. Labor costs are rising across Europe, as are infrastructure costs. So I think we won't see prices go down again. But at the same time, we offer tickets starting at 138 euros from Spain to Germany, round trip. Flying still has the affordability we need to make it accessible to much of Europe's population. But I hope we don't go back to those incredibly low pre-covid prices.
Last year, European justice annulled the 6 billion euro bailout they obtained from the German Government after Ryanair's complaint. Has this decision affected you in any way?
The only effect it will have will be on some jurists at universities, in the academic field, because we have already returned all government support.
The European Commission has set sustainable fuel use (SAF) requirements for the coming years. Is it realistic?
No. There is sustainable aviation fuel, of biological origin, which is not enough and is very expensive. Now there is also a subquota according to which a certain percentage must come from so-called refuels, which are made synthetically, which require a large amount of energy to produce. That doesn't even exist yet in our industry. It exists in universities and laboratories, but it is not available to fill our airplanes. So these quotas are not realistic in terms of either availability or affordability, because the prices are up to eight or ten times higher than fossil fuels, and our customers will not be willing to pay that. We should therefore carry out a review with the new European Commission.
European competition is reviewing the purchase of the Italian airline ITA by its group, to avoid monopoly situations. Are they going to increase the remedies [transfer of routes] to facilitate the operation?
We are in a constructive dialogue with the European Commission, more and more politicians realize that we need airline consolidation for two reasons. First, countries like Italy or Spain need their own airline to be connected to the world as large economies. Second, big players like our friends at IAG or ourselves need to grow inorganically to keep up with the big operators in the United States and in the future of China. Consolidation is the only way to keep Europe well connected. We do not want a Europe that cannot connect by its own means.
