Lufthansa Expands in Asia, Targeting Premium Travel Growth
FRANKFURT/BANGKOK—Lufthansa Group, the German aviation giant, is betting on the burgeoning Asian aviation market, particularly Thailand, to fuel its growth. This expansion encompasses both its flight network and its non-airline businesses. In an interview with the Bangkok Post, Carsten Spohr, Chief Executive of Lufthansa Group, highlighted Thailand’s multifaceted appeal, emphasizing its importance beyond tourism as a hub for various business operations.
Spohr cited escalating cargo demand from Thailand and the Asia-Pacific region’s rapid growth in Maintenance, Repair, and Overhaul (MRO) activities. This presents a strategic opportunity for Lufthansa Technik, the group’s MRO arm, which already serves the Royal Thai Air Force. The company is actively seeking new customers and partnerships to capitalize on this expanding market. This MRO focus complements Lufthansa’s broader strategy of diversifying revenue streams beyond passenger travel.
On the passenger side, Bangkok is Lufthansa’s largest destination, with over 10,000 weekly seats across 27 flights from its European hubs. This includes the recently added Rome route via ITA Airways, in which Lufthansa holds a 41% stake. Bangkok’s position as a regional gateway benefits Lufthansa, with roughly one-third of its inbound passengers connecting to other destinations within Thailand and across Asia. Responding to robust demand, particularly during the Songkran holiday in April, Lufthansa extended its Airbus A380 service from Munich to Bangkok, planning to continue this offering into the winter schedule starting in October. Furthermore, the airline will introduce its new “Lufthansa Allegris” cabin design on long-haul flights to Thailand next year, following its successful rollout on routes to Shanghai and Mumbai. This upgrade underscores Lufthansa’s commitment to enhancing the passenger experience.
While Asia currently accounts for approximately 14% of Lufthansa’s passenger revenue and a significant 42% of its cargo revenue, the closure of Russian airspace presents an ongoing challenge for European carriers expanding in the region. Spohr expressed hope for the eventual reopening of Russian airspace, which would streamline operations to Northern Asia, currently hampered by circuitous routes and resulting delays.
Despite these geopolitical headwinds, Lufthansa Group remains optimistic about the global aviation outlook for 2025, citing strong forward bookings and robust travel demand fueled by post-pandemic travel desires. This positive outlook is further bolstered by the group’s investment in upgrading its aircraft and services, reinforcing its premium positioning within the European airline landscape. Lufthansa recently introduced a new first-class cabin—its first such upgrade in a decade—with Swiss Air slated to follow suit later this year. The group has observed a marked increase in leisure travelers opting for premium seats compared to pre-pandemic levels, indicating a willingness to invest in enhanced travel experiences, even as corporate travel lags. This trend aligns with Spohr’s analogy of the Lufthansa Group as a combination of “German cars and Swiss watches,” highlighting its focus on quality and prestige.
Lufthansa Group projects at least double-digit capacity growth in 2025, with ITA Airways alone contributing over 10% and other carriers anticipated to achieve 5% growth. The group’s fleet is set to expand by over 100 aircraft through the ITA integration, adding to its existing 730. The recent ITA Airways integration also allows Lufthansa frequent flyers to earn status points when traveling with ITA, enhancing loyalty program benefits. Additionally, Lufthansa Group acquired a 10% stake in Air Baltic, which will serve as a wet lease provider, mitigating potential aircraft shortages this summer due to Pratt & Whitney engine issues. Financially, the group anticipates exceeding €40 billion in turnover for the first time in 2025, with a budget of up to €4 billion earmarked for aircraft modernization and the acquisition of 26 new aircraft this year. Lufthansa is slated to be the launch customer for the Boeing 777X in 2026.
However, Spohr acknowledged that airfares are likely to rise due to strong demand and limited aircraft supply. Rising taxes and regulatory costs, especially in Europe, will also contribute to increased expenses. Specifically, Lufthansa levies an environmental surcharge on all flights originating from Europe to cover the costs of using a 2% blend of sustainable aviation fuel for departures from the European Union. Approximately 4% of Lufthansa passengers voluntarily opt for a “green” fare to further support sustainable travel initiatives, reflecting growing passenger awareness of environmental concerns within the aviation industry.
