A-I plans 2nd hub in Germany

After Frankfurt, the airline may opt for Munich as its other base in Europe.

State-owned Air-India might decide in favour of having two airport hubs in Germany - one at Frankfurt and another in Munich.

The talks for the same are currently in progress with Air-India CMD V Thulasidas likely to announce the choice of hubs officially this week.

"Air India would ideally want to have both Frankfurt and Munich as European hubs as the airline does not want to vacate Frankfurt and also wants to establish Munich as a hub for operations after network expansion plans come through," said an Air-India official close to the development, not wanting to be quoted.

Air-India is planning to use the Frankfurt hub for its flights to the US originating from Mumbai and New Delhi. It intends to use the passenger traffic from US flying into Frankfurt as a feed for the afternoon flights back to India. The airline currently operates daily flights to Frankfurt.

According to experts, having more than one hub in a country is a practice which is becoming popular with airlines. Such a move, however, is dependent on the availability of slots and if there are bilateral agreements between the countries, it makes all the more sense.

Apart from London's Heathrow, Europe has now developed major hubs in Paris, Helsinki, Brussels (Jet Airways' hub) and now Frankfurt and Munich.

The public carrier plans to shift to the Munich airport when the load get better. The airline has limited operations in Munich (connectivity to Los Angeles and Chicago) and the expanding airport offers cost incentives, which would translate into savings of 25-30 per cent on the costs involved in Frankfurt.

But Air-India, under current negotiations, is being assigned terminal 1 at the Munich Airport as opposed to its choice of terminal 2 from where most of the Star Alliance members operate. That part is being negotiated.

According to Air-India, Frankfurt is a better bet as the city is well connected with the rail-system within and around Germany, and has considerable transit passenger population. "If we have a hub in Frankfurt, we will not have to depend on other Star Alliance members for the feed," said the official.

Air-India sources say it is a difficult negotiation for Frankfurt as German carrier Lufthansa, the dominant and founder member of Star Alliance, does not want a competitor having a hub where it is a major player.

A hub at Frankfurt will come at a price for Air-India as the airport has major congestion issues since it is one of the most important hubs in Europe and offers connecting services to long-haul destinations in the US, Asia and Australia.

Currently under expansion, the demand for a take off and landing slot in Frankfurt is staggeringly high and goes at a premium.

Air-India is banking on the expansion and, as and when the proposed runway becomes operational, it sees the congestion problem alleviating.