Lufthansa's Weber Sets Agenda for Recovery - and Rewrites a Chinese Wish

As typhoon Imbudo bore down on Hong Kong, Dr. Juergen Weber, Chairman of the Supervisory Board of Deutsche Lufthansa AG, called on governments to address six major issues in order to secure a stable and efficient airlines industry in these storm-tossed times.

But he warned that crises, instead of being occasional episodes of turbulence, had now become a routine fact of life for the industry. “A normal situation is the exception,” he told a lunch co-hosted by Aerospace Forum Asia, the German Chamber of Commerce, the Dutch Business Association and the Hong Kong Austrian Association.

In her vote of thanks Liz Bosher, AFA’s Director-General, described Dr. Weber’s speech as “truly inspirational”. Weber recounted how he had steered Lufthansa through major restructuring and led the company to its privatization in 1997, enabling the company to report the best 2002 annual result in the industry despite a post-9/11 slump in travel.

Emphasizing the vital importance of air travel for world trade, global cooperation, social and economic development and – not least – tourism, Weber said he was confident that air traffic would increase again and hopefully – he stressed the word hopefully -- return to normal. “The current geopolitical situation is something none of us can afford in the long term.”

He also set out six points for governments to address:

liberalise ownership rules so airlines have access to global capital markets. “This is still not the case.”
break up the monopoly possessed by airport and air traffic services (ATS) providers. “The value chain in air transport is highly lopsided.”
increase cooperation between national competition authorities and harmonise regulations. “The industry is out of tune in many parts of the world.”
exercise restraint in imposing discriminatory taxes and fees on the aviation industry. “We are the most heavily charged industry.”
desist from unilateral measures that harm consumer interests, and
assume responsibility for air transport security and related costs. “Public security is a public duty.”

Concluding his address by sounding a slightly world-weary note in view of the successive blows to the aviation industry, Weber said: “We all know the famous Chinese wish ‘May you live in uninteresting times.’ I always used to think: how dull.

“But now I too wish that we could have slightly less interesting times in the airline industry.”

During a Q and A session, he made a plea for increased liberalization of traffic rights so that airlines could fly into important markets without any limitations. “We suffer very much because we have no traffic rights from Hong Kong into mainland China. We cannot code share with any partner….There are thousands of examples like this.”

Asked about the prospects of low-cost carriers, Weber reiterated his warnings about the dangers of a budget carrier bubble developing as a result of over-rapid expansion. He noted that Germany already had 13 low-cost carriers. “I am sure that in a few years from now most of them will disappear.”

The situation in Asia was different. “Asia is not the United States, Asia is not Europe, Asia is not a connection between UK and continental Europe. Here, especially when we are looking at the longer routes, I cannot see a system which will be successfully working under the pure low-cost concept.”

But he noted that on longer routes, carriers such as Singapore Airlines were already low-cost, but high-quality, airlines.

Weber said the opening of talks between the European Union and the United States on open skies traffic rights was an important step, seeing the negotiations as a model for other areas of the world. “If this works over the North Atlantic, the European Union will start to discuss this issue with other regions of the world.”