Fifty years in Ethiopia

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Carsten Spohr has been Chairman of the Executive Board of Deutsche Lufthansa AG since 1 May 2014. He manages the Lufthansa Group with the business segments Hub Airlines, point-to-point traffic and service companies that have around 120,000 employees worldwide. He visited Addis Ababa this week to attend Lufthansa’s Africa Area Managers Summit. He talked to Capital about his company’s vision for Africa. Excerpts;

 

Capital: What is the purpose of your visit?
Carsten Spohr: I am here for two crucial events. One is to celebrate 50 years of service in Ethiopia and to promote the upgrading of our service to five non-stop flights to Ethiopia. I am delighted to emphasize the importance of Ethiopia for Lufthansa. Every year, I invite the entire management team of Africa to one strategic place in the continent and we have chosen Ethiopia for this year. We also are making sure that Ethiopia is seen on the global Lufthansa network as an important location.

Capital: Have you met any officials since you came here?
Spohr: I met with my Ethiopian airlines counterparts and we will have receptions for our important customers. The German Ambassador has joined us to celebrate what we have worked on together.

Capital: Are you talking to the airline about mergers or buyouts?
Spohr: We have ten years of joint service with Ethiopian for our common customers and we will talk about how can we develop our partnership. We have Ethiopian airlines to develop into a star alliance member and we are now looking to further the next steps to make the service best for our joint customers.

Capital: There were negotiations to buy the maintenance part of Ethiopian?
Spohr: I haven’t heard anything about this topic, but we are working jointly to develop the African maintenance market with Ethiopian Airlines technique and Lufthansa technique. Our Lufthansa technique is the largest all over the world. We signed the MoU in December with Ethiopian and now we are discussing the next steps of moving forward in Africa together.

Capital: Ethiopian Airlines is up for privatization, according to the government are you planning to own a share?
Spohr: We don’t talk about transactions in public, but we establish partnerships, so we are focusing on that now.

Capital: How was your performance last year globally?
Spohr: Last year was the best year of Lufthansa. We have grown our passengers to 140 million, maintain our number one role in Europe, we have introduced a new brand which makes last year the success.

Capital: You began face recognition boarding at Miami International Airport, are you planning to do that in Africa?
Spohr: Los Angeles will be the next place for this huge innovative program. We invested half a billion euros for innovation. It’s not only being the largest for us but also being the most innovative. If there is a country which is willing to do this in Africa, I am happy to send a team and explore this as you need the government and airline support to do this. So, I am happy to see this in Africa.

Capital: You paid more than 500 million Euros for compensation of delayed flights. What’s your comment on this?
Spohr: Indeed there has been a huge problem in Europe which basically can be summed up by the fact that we had more flights, more than what the infrastructure can cope with both in the air traffic and airports. That resulted in a high non-satisfaction punctuality and irregularity rate. So, I would like to apologize our customers in Ethiopia for the irregularity. We are working very hard over the winter to change this to make progress and we hired 600 people for service recovery. We also put 25 aircraft in Africa to cope with delays. So, we are investing a lot and working hard to solve this.

Capital: You opened an innovation center in Singapore, do you have any plan to have similar projects in Africa?
Spohr: We have invested in a 500-million-euro innovation program in Berlin, and we decided to move to Asia we chose Singapore. If we are looking to expand more, we will be happy to work with Africa.

Capital: Do you have any other airline which you work in partnerships in Africa?
Spohr: Ethiopian airline is the most important. We are also working with South African Airline which is part of Star Alliance. As you know Lufthansa Group is not only about passenger travel but the Lufthansa catering and Lufthansa Technique have a lot of shares in various African airlines. We are talking with our management about how we can expand the footprints of Lufthansa in Africa.

Capital: The aviation business in the world is not stable regarding profit. How are you dealing with that?
Spohr: The aviation industry has been volatile historically but indeed there has been double growth in the global economy. We are working hard by consolidation, bringing our cost down and being more resilient to crisis and now and now we have had a great year. I think Lufthansa has proven that we are doing our homework.