 "Air India, Lufthansa deepen ties, expand codeshare on India-Australia route")
German aviation major Lufthansa has agreed to expand its codeshare agreement with Tata-owned Air India on the popular India-Australia route, according to a report by The Economic Times (ET).
In this updated arrangement, Lufthansa passengers flying from Frankfurt and Munich can now seamlessly connect to Sydney and Melbourne via Delhi and Mumbai airports using Air India flights.
Similarly, Swiss Airlines, a part of the Lufthansa group, will collaborate with Air India as part of the arrangement. Passengers from Zurich can now access Sydney, Melbourne, and Kathmandu through Air India flights, with Delhi Airport as the connecting hub.
A codeshare agreement is a prevalent business arrangement within the aviation sector involving two or more airlines jointly publishing and promoting a particular flight using their respective airline designator and flight number (known as the "airline flight code") in their published timetables or schedules.
This collaboration marks a rare instance where Lufthansa has agreed to share its code for international routes with Air India, as noted by experts cited by ET. While Lufthansa operates joint ventures with Singapore Airlines (SIA) for Europe to Australia routes, it does not directly operate on these routes.
Separately, the Tata Group and SIA are undergoing restructuring in their Indian airline business, which involves the merger of Vistara into Air India, with SIA holding a 25.1 per cent stake.
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This partnership indicated a potential for increased cooperation between the two airlines, especially as Air India enhances its inflight services with refurbished aircraft and improved airport facilities, ET claimed.
Furthermore, there are indications that the two airlines are working towards a metal-neutral joint venture on routes between India and Europe, wherein revenue generated by both carriers will be shared regardless of which airline operates the flight, the report added.
Lufthansa plans to cut costs
Earlier last month, Germany's Lufthansa said that it would cut operating costs, pause new projects, and increase scrutiny of additional administrative staffing to make savings at its core brand, Lufthansa Airlines, and stem heavy losses from strikes.
The aviation major has been facing significant competition from West Asian carriers such as Emirates and Qatar Airways, which have eroded the market share of European airlines with competitive pricing and premium offerings over the years.
The carrier spent 350 million euros ($374.82 million) in the first three months of this year after agreeing higher wages for staff and dealing with disruption costs from cancellations.
In March, Lufthansa reported an operating profit of 2.7 billion euros for 2023 as per expectations, adjusting its outlook for its 2024 operating margin down to 7.6 per cent from a goal of 8 per cent as the German airline struggles with costly labour disputes.
The company had said that the impact of strikes and a drop in logistics profits will lead to a higher expected operating loss in the first quarter than in earlier years, offsetting strong post-Covid travel demand.
In April, Lufthansa slashed its first-quarter full-year outlook following a wave of costly industrial action, sending its shares down.