India Forum ITB 2006

India and Europe are getting closerThe opening skies over India

Werner HeesenGM Passenger Sales India &Director South AsiaLufthansa Passenger Airline

Berlin, 8 March 2006

India Forum ITB 2006

India’s travel potential is tremendous

India – 17% of the world’s population.

0.02% of the world’s air traffic

Over 120 million people as potential for air traffic

The main traffic streams to the West are going to North America and Europe.

Germany is not yet known and accepted as tourist destination in India

48%

30%

17%5%

N America

Europe w/o FRG

FR Germany

Others

India Forum ITB 2006

The Skies over India are gradually opening …

New Policy Guidelines by the Indian Ministry of Civ il AviationNew Policy Guidelines by the Indian Ministry of Civ il Aviation

Gradual opening of the Indian market: 1. SAARC countries, 2. ASEAN,3. India – UK , 4. Open Sky Policy India – US,) 5. India-France. 6. India FRG (April 2005)removal of royalty agreements and other forms of payments by foreign airlines.

Gradual opening of the Indian market: 1. SAARC countries, 2. ASEAN,3. India – UK , 4. Open Sky Policy India – US,) 5. India-France. 6. India FRG (April 2005)removal of royalty agreements and other forms of payments by foreign airlines.

Support for Indian National Carriers AI und IC by granting additional fundsfor fleet expansion, modernization. Privatisation/merger of Air India and Indian planned.

Support for Indian National Carriers AI und IC by granting additional fundsfor fleet expansion, modernization. Privatisation/merger of Air India and Indian planned.

“Go ahead” for private carriers in India: Jet Airways/Air Sahara, Air Deccan,Kingfisher Airlines, Spice Jet, Go.Major expansion plans for domestic and international operations.

“Go ahead” for private carriers in India: Jet Airways/Air Sahara, Air Deccan,Kingfisher Airlines, Spice Jet, Go.Major expansion plans for domestic and international operations.

Extension and modernization of existing main airpor ts , construction of new regionalairports, privatisation of airports and acceptance of foreign investment. Supporting measuresto upgrade and to modernize infrastructure in Delhi, Mumbai, Bangalore, HyderabadNew cargo hub in Nagpur.

Extension and modernization of existing main airpor ts , construction of new regionalairports, privatisation of airports and acceptance of foreign investment. Supporting measuresto upgrade and to modernize infrastructure in Delhi, Mumbai, Bangalore, HyderabadNew cargo hub in Nagpur.

India Forum ITB 2006

The infrastructure is limiting the growth of aviati on industry

Growth and opportunitiesGrowth and opportunities

The economic framework in India remains positive.2004: Domestic traffic + 25%, Intercontinental traffic to Europe/North America + 8-10%2005: Record overall growth + 20%2006: + 10%

The economic framework in India remains positive.2004: Domestic traffic + 25%, Intercontinental traffic to Europe/North America + 8-10%2005: Record overall growth + 20%2006: + 10%

Airports in Mumbai, Delhi and Bangalore have reached capacity limits.All Metro airports in India have only one runway.Clash for interest: Increasing demand for intercontinental and domestic traffic for same slots.Worsening conditions for start-up carriers.

Airports in Mumbai, Delhi and Bangalore have reached capacity limits.All Metro airports in India have only one runway.Clash for interest: Increasing demand for intercontinental and domestic traffic for same slots.Worsening conditions for start-up carriers.

InfrastructureInfrastructure

The airport infrastructure determines the growth ra te. Thus, only limited capacity increases possible up to 2008. The new boo m will start latest by 2010.

India Forum ITB 2006

Region SO'05

(Weekly seat capacity)Winter'05

(%age inc. vs. SO'05)SO'06

(%age inc. vs. SO'05)

Delhi EU 24,478 24.72% 17.87%

NA 1,790 265.92% 265.92%

TTL 26,268 41.16% 34.77%

Mumbai EU 29,919 5.84% 10.68%

NA 8,005 0.00% 0.00%

TTL 37,924 4.61% 8.42%

Chennai EU 6,105 19.82% 19.82%

NA 0 0.00% 0.00%

TTL 6,105 19.82% 19.82%

Bangalore EU 1,175 403.74% 395.40%

NA 0 0.00% 0.00%

TTL 1,175 403.74% 395.40%

Hyderabad EU 2,863 29.55% 29.55%

NA 0 0.00% 0.00%

TTL 2,863 29.55% 29.55%

Total EU 64,540 22.62% 22.11%

5 Metros NA 9,795 48.60% 48.60%

TTL 74,335 26.04% 25.60%

Winter 2005/2006: Main capacity growth in Delhi and Bangalore

India Forum ITB 2006

. Gateways in India

Delhi

Mumbai

Bangalore

Chennai

India has her own rules: Success Factors

Hyderabad(

Trust in India’s sustaining growth

Continuity, sustaining presenceand commitments

Open mind for co-operations

Patience

India requires special service concepts suiting Indian needs

India Forum ITB 2006

Gateways in India

Delhi

Mumbai

BangaloreChennai

Lufthansa – The leading European Airline in India

Lufthansa started operations in 1959 from Kolkata with twice-weekly services.

In April 2006 Lufthansa will operate 42 flights between India and Germany a week.

Today, Lufthansa is the leading European passenger airline in India.

Hyderabad

India Forum ITB 2006

0

3

69

12

15

18

21

2427

30

33

36

1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

(Fre

quen

cies

per

wee

k)

1959CCU Ops2/7

1963DEL Ops1/7

1971CCU ops

Cancelled. BOM

Ops Started4/7

1994MAA Ops2/7

2001BLR Ops 3/7

DEL 2/7DEL 3/7

DEL 5/7

DEL 6/7DEL 7/7

MAA 3/7

BOM 7/7

MAA 6/7

Lufthansa Capacity Development India 1959 – 2006

DEL 4/7

BOM 5/7

2004 DEL Ops 10/7(MUC-DEL-MUC)

DEL 10/7

2005 HYD Ops 3/7(FRA-HYD-FRA)

Average capacity increase 2001-2004 + 19% p.a.Daily flights to all Lufthansa destinations in India 2006Twice daily connections from Delhi (Frankfurt/Munich)New destinations in India will be explored

42

2006HYD7/7

India Forum ITB 2006

Lufthansa Offers Special Features for ethnic Indian Passengers

Lufthansa’s route planning follows the traffic streams from/to India:Best network and connections to Europe & North Amer ica

Lufthansa’s route planning follows the traffic streams from/to India:Best network and connections to Europe & North Amer ica

Indian Flight attendants on all Indian routesIndian Flight attendants on all Indian routes

Indian Welcome Service at Frankfurt Airport (Hindi, Tamil)Indian Welcome Service at Frankfurt Airport (Hindi, Tamil)

In-flight Service designed to suit Indian needs (Meals, entertainment program,newspapers & magazines)

In-flight Service designed to suit Indian needs (Meals, entertainment program,newspapers & magazines)

Call Center for Indian market (Gurgaon January 2005)Call Center for Indian market (Gurgaon January 2005)

India Forum ITB 2006

Lufthansa Aviation Group in India

Lufthansa Cargo operates in India since 1969 and offers today 5 destinations and 47 frequencies a week.

Lufthansa Sky Chefs offers premium catering standards in Bangalore (2001) and soon in Hyderabad (2005).

Globe Ground India is handling Lufthansa’s passenger and cargo flights in India.

RDM: Lufthansa system’s successful joint venture with the Bird Group. Since February also operating the Lufthansa Call Center in Gurgaon.

Lufthansa will also represent theGerman National Tourist Board DZT inIndia as from 2006.

Lufthansa will also represent theGerman National Tourist Board DZT inIndia as from 2006.

India Forum ITB 2006

Gateways in India

Delhi

Mumbai

Bangalore

Chennai

Lufthansa is prepared for the growing Indian market

Hyderabad

Expansion

Best network from East to West

Innovation and leadership in quality

Special features for ethnic Indianmarket segment

Co-operations: Air India, Jet Airways

India Forum ITB 2006

Outlook and Conclusions

India is a growing market for civil aviation India is a growing market for civil aviation

Infrastructural limitations until 2008Infrastructural limitations until 2008

Important policy decisions are madeImportant policy decisions are made

“Big Boom” expected from 2010 onwards“Big Boom” expected from 2010 onwards

Private sectors gets investment opportunities - infr astructurePrivate sectors gets investment opportunities - infr astructure