The Star Alliance Partner airlines signed a Memorandum of Understanding as starting point for a comprehensive Joint Business Agreement. This will include the airlines of the Lufthansa Group, Air India and Air India Express.
However, the group’s air cargo daughter, Lufthansa Cargo is left out of the MoU, at least for the time being. This is rather surprising given that India is an increasingly important market for the freight carrier, and is firmly anchored in its intercontinental network, as Lufthansa Cargo’s communications department emphasizes when approached by CargoForwarder Global. With its growing economic role as producer and/or importer of pharmaceuticals, automotive and high-tech items, demand for reliable air freight connections between India, Europe, and other regions of the world is growing. “Through our own freighter capacities and the belly capacities of the Lufthansa Group Airlines, we offer stable transport solutions and thus support the growing trade relations between India and Europe – in line with our mission of enabling global business,” states spokesperson, Jan Paulin.
FTA – big door opener
This became evident on 27JAN26, when the EU and India signed a free trade agreement (FTA). The deal is expected to strengthen economic and political ties between the world’s second and fourth largest economies, spurring passenger and cargo traffic. India will grant the EU massive tariff reductions (-96.6%) that are forecast to double EU exports to India by 2032, while the Indian agri-food sector but also its fast-growing chemical, IT or pharmaceutical industry will greatly benefit from the deal. Overall, the trade liberalization will save around €4 billion per year in duties on European products imported by India.
Though Lufthansa Cargo is not part of the MoU, the flight frequencies demonstrate how important the Indian market is for the cargo carrier. Lufthansa’s freight arm offers the market daily B777F operations to and from Frankfurt. The freighters serve BOM, DEL, HYD, MAA, and BLR alternately. Its parent, Lufthansa Passenger Airlines, serves India 44 times a week, with 25 flights departing in FRA and 19 in MUC. In addition, its group members, Swiss and ITA Airways, also operate flights to India. The lower decks of the aircraft, filled with pallets and containers, contribute to high cargo loads.
25% of the world’s GDP
The Memorandum of Understanding, signed by Lufthansa CEO, Carsten Spohr and Campbell Wilson, his counterpart at Air India, is aimed at capitalizing on new growth opportunities arising from the recently concluded free trade agreement between India – the world’s most populous country – and the European Union (EU). The EU states are India’s largest trading partners for goods. Bilateral trade currently totals €180 billion per year. Both economic powers account not only for a quarter of the world’s population, but also for a quarter of the world’s gross domestic product (GDP). The latest agreement creates nothing less than the world’s largest free trade area.
From black sheep to desired partner
For many years, Star Alliance member, Air India, was considered the unloved black sheep of the airline association due to poor service, minor and major scandals, and numerous passenger complaints. But that has changed. Since 2023 at the latest, Air India and the Star Alliance intensified their relations, following a multitude of service improvements initiated by management, combined with the order for 470 Airbus and Boeing aircraft. This was supplemented a year later by adding a further 100 Airbus jetliners to the orderbook. These initiatives also improved the airline’s reputation in aviation circles.
New chapter in aviation
During the MoU signing ceremony, Carsten Spohr, Chairman of the Executive Board of Deutsche Lufthansa AG and Chief Executive Officer of the Lufthansa Group stated: “Today’s agreement […] is a strong signal of our mutual determination to open a new chapter in aviation between the EU and India, following the landmark trade agreement between both economic regions. Together with Air India, we will strengthen our access to the aviation market with the highest growth rates worldwide. The Lufthansa Group is already the most successful and most popular European airline group among customers in India. In the future, we will contribute to deepening economic and cultural relations between India and Europe with even more connections. With our new long-haul aircraft and Lufthansa Allegris and SWISS Senses on board, we are offering a significantly improved premium travel experience in all classes on more and more routes, including to India.”
Unlocking greater value
Campbell Wilson, Chief Executive Officer and Managing Director, Air India, responded to this: “This milestone in our deepening relationship with the Lufthansa Group is great news for travelers and enterprises alike between India and Europe. As Air India continues to expand its global footprint with a fast-modernizing fleet and transformed product and service offerings, this framework enables us to explore closer cooperation on multiple fronts to meet the growing trade, commerce, and people-to-people ties between our respective regions. This would unlock greater value for our common customers and respective shareholders, and we look forward to progressing these initiatives together with the Lufthansa Group.”
Strengthening the ties
Both executives spoke of an initial step and emphasized their intention to expand the collaboration. The focus will be on further coordination of flight schedules and route networks in selected markets so that passengers can benefit from better connections and shorter transfer times. In addition, both partners want to combine their sales and marketing activities for flights between the Lufthansa Group’s European home markets and India, better integrate frequent flyer programs, and optimize airport processes for improved customer comfort.
Long-standing relationships
Lufthansa can look back on more than 60 years of shared history with India. The airline first landed in Delhi as early as 1959. This connection has been continuously expanded. A codeshare agreement with Air India has existed since 2004, and in 2014 the Indian airline joined the Star Alliance co-founded by Lufthansa. In FEB25, the Lufthansa Group and Air India announced the expansion of codeshare agreements between Lufthansa, SWISS, Austrian Airlines, and Air India.
The Hinduja JV
In this context, it should also be noted that Lufthansa Cargo once had close ties to India. Together with the Hinduja Group, it founded its own cargo airline in 1996, called Hinduja Cargo Services, with Hinduja holding 60% and Lufthansa Cargo 40% in the airline. The fleet included three B727-200 freighters, which served routes between Lufthansa Cargo’s local hub, Sharjah in the UAE, and destinations in India. In APR00, the company was dissolved because the forecast traffic results had proved too optimistic. And thanks to its then-new MD-11F freighter fleet, Lufthansa Cargo was able to fly nonstop to India, eliminating the need for Sharjah as a hub.
