More and more business trips go to India

Frankfurt Anyone traveling on behalf of their company is traveling to India more and more frequently. This is shown by a current analysis by the Lufthansa subsidiary Airplus, a business travel service provider.

According to the analysis, India ousted China from second place among the most popular long-haul destinations for business travel last year. The USA remains in first place.

Chancellor Olaf Scholz (SPD) has just been to India – accompanied by a business delegation. “We feel an increased demand for India,” said Oliver Wagner, CEO of Airplus, the Handelsblatt. The travel expert also attributes the new ranking to the long and strict corona measures in China, which have only now been relaxed again.

“We will see a sharp increase in trips to China in the coming weeks,” predicts Wagner. In the second half of the year, China could again reach 60 percent of the pre-crisis level for business trips.

Nevertheless, one thing is certain for the Airplus boss: “In Asia, the focus of travel will shift permanently.” That is obviously happening relatively quickly. In the pre-crisis year of 2019, India was still in fifth place in the annual Airplus ranking.

With around 1.41 billion people, India almost overtook China (1.42 billion people) last year as the most populous country in the world. Experts assume that India will soon be number one.

The sheer size alone makes the country an attractive market for the export-oriented German economy. In addition, growth in India helps German companies to become less dependent on China in Asia.

Export to India is growing

Many managers and entrepreneurs complain about the major hurdles, such as overly complex bureaucracy, customs barriers and trade barriers. But if the Indian government keeps its word and removes the obstacles, investment will continue to rise.

The mechanical engineering association VDMA recorded growth in export volume for India of 28 percent to almost four billion euros last year. This puts India in 14th place among the countries that import the most machinery and equipment from Germany.

A few weeks ago, Siemens received the largest single order for locomotives to date for its rail division. The state Indian railway company Indian Railways ordered 1,200 electric locomotives – volume including service: around three billion euros.

“India is not developing gradually, there are leaps in technology there,” said Marc Llistosella, the new boss of Knorr- Bremse. “It’s a permanent boom, look at the growing middle class. India is always between Europe and China in terms of development speed.”

>> Read also: Companies complain about bureaucracy – “Business trips to the USA are easier than to the EU”

Not only the manufacturing industry has therefore kept an eye on the country, but also the aviation industry. The Airplus mother Lufthansa wants to expand its presence in India. CEO Carsten Spohr wants to travel to Mumbai with a management team in March. It would be his second trip to India in a short period of time.

On his first trip, Spohr discussed closer cooperation with Air India. The Indian airline is set to become the core of domestic aviation. A few days ago, the company ordered 250 passenger aircraft from Airbus and 220 from rival Boeing, including some long-haul aircraft.

Lufthansa boss Spohr wants to form an international network with hubs in India, Europe, North America and Singapore together with Air India, Singapore Airlines and the US partner United Airlines – in order to benefit from growth in the future markets of Asia. Anyone flying west from here should ideally use the hubs of the network partners and not those of the Gulf airlines such as Emirates, Qatar Airways or Etihad.

Carsten Spohr

Second trip to India within a few months.

(Photo: IMAGO/HMB Media)

Air India’s owner, the Indian Tata Group, rearranged ownership a few months ago. The low-cost offshoot Vistara, in which Singapore Airlines held a stake, will be integrated into Air India. In return, Singapore Airlines will take over 25.1 percent of Air India.

With his network plan for Air India, CEO Spohr is aiming for a growing number of business travelers. Airplus boss Wagner provides the basis for the numbers and sees a comeback of business trips. “For this year we are planning at 90 percent of the pre-crisis level. Of course, a lot depends on further developments in China.”

The southern hemisphere will be an exciting market. Business trips in Latin America were already above the pre-crisis level last year. Oliver Wagner, CEO of Airplus

According to Wagner, another region should not be overlooked. “The southern hemisphere will be an exciting market,” predicts the Airplus boss: “In Latin America, the volume of business trips was already above the pre-crisis level last year.”

The data shows that companies are once again spending more money on business trips on average. “We come from a difficult time, in the companies the duty of care for the employees has gained in importance,” explains Wagner. Anyone who is careful to keep their distance for reasons of infection protection feels more comfortable in business class.

In addition, companies often have little choice but to book more expensive flights. “Prices will remain high compared to pre-Covid, even if the sharp increase seen in 2022 is unlikely to be repeated,” says Wagner.

But the capacities for flights remain tight, also because China is opening up. “A reduced supply meets a strong demand, which is not least driven by private travellers.” Since private trips are usually booked earlier, companies often only have the option of buying expensive tickets.”

The development for trips over shorter distances looks different. The data from Airplus show that the volume is still well below the pre-crisis level. In this segment, the recovery will come last. There are also alternatives: “Flights compete with rail and virtual conferences here.”

More: Longer and more comfort – how business trips are changing.

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