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Old Mar 18, 12, 8:40 am   #1
 
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SWISS boss announces price increase

SWISS CEO announced in an interview with the NZZ to increase prices.

http://www.nzz.ch/nachrichten/wirtsc....15873815.html

It is also interessting that the SWISS employees bring 7x more profit to Swiss than an LH colleague - good for SWISS but bad for LH. I hope some of the LH cabin crew reads this article and may be starts thinking about it.
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Old Mar 19, 12, 4:56 am   #2
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Originally Posted by HKG1111 View Post
It is also interessting that the SWISS employees bring 7x more profit to Swiss than an LH colleague - good for SWISS but bad for LH. I hope some of the LH cabin crew reads this article and may be starts thinking about it.
It might have something to do with the fact that there are less LX employees as all ground handling in Switzerland (and elsewhere) is outsourced to Swissport, while LH self-handles at many destinations. If Swissport cost are added, I am sure the profit per LX employes would be much lower than 7x.
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Old Mar 19, 12, 3:39 pm   #3
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I want the Lufthansa group to make a good return for shareholders- given the growth perspectives in much of the EU at the moment however it seems an odd time to raise prices.

Consumption is down.

Taxes are up.

Unemployment is up in many countries.

Debt per capita is rising quickly.

I am not sure what can drive the rise in prices right now- guessing it is that inflation in many EU countries is very high?

LX is providing a good product- lets hope they can keep up the value component as well.
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Old Mar 20, 12, 5:04 am   #4
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The past 6 weeks I'm seeing the B2B chemical market back with strong demand... the EU crisis that was in the mindset the past two quarters is definitely over and western europe is going to do very well till atleast Q3. So I understand their attempt to turn the price clock back.
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Old Mar 20, 12, 5:20 am   #5
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the EU crisis that was in the mindset the past two quarters is definitely over and western europe is going to do very well till atleast Q3.
It will be wonderful if you are right about this- however my view on the EU is quite different. If Western Europe reads "Germany/Austria" I agree with you- however that is not quite how the economic definitions have been drawn up.

A price increase right now will be extremely difficult.

Note some industries are seeing temporary increases as companies who exhausted their inventories are having to restock- this cycle does not translate into a good year for Western Europe unfortunately.

Looking forward on orders for capital intensive industries for the next two years does not show a birght picture in Europe. Combine with structural unemployment. I just don't see it (however would love to be wrong on this call).
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Old Mar 20, 12, 6:51 am   #6
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The IFO indicator for mid size german industry (ie capital good manufacturers) is back in the boom phase/quadrant:

http://www.finanzen.net/ifo/
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Old Mar 20, 12, 6:58 am   #7
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The IFO indicator for mid size german industry (ie capital good manufacturers) is back in the boom phase/quadrant:

http://www.finanzen.net/ifo/
Thanks Oliver-

Always good to see some positive looking indexes!

If the EU looks like this- I won't even be complaining about A fares for a few years.

One last question- if the industry is doing so well and fares can be increased- why launch a major cost cutting initiative (SCORE) which will risk to alienate the very high paying customers you can charge more?

I don't see LVMH or Bottega Veneta cutting product quality or staff at the moment.
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