GBM.flights

April traffic figures due today
http://investor-relations.lufthansag...-calendar.html

GBM.flights

LH April, Jan-Apr + respective comparisons:

LH Guidance from last week:

N1003U

Interesting numbers. I wonder if the yields have hit bottom...I also wonder what belly cargo is dong to the overall result--is belly cargo revenue on passenger flights recorded under Passage or Cargo?

Here is some interesting data on how the EU3 is making adjustments to the current conditions:
http://centreforaviation.com/analysi...-growth-223117

oliver2002

AB published their numbers yesterday too...

gum

Thanks for updating us.

I think the cargo load factor is interesting:
"Cargo load-factor (%) 65.6 -2.9pts. 68.4"

It is down nearly 3 percentage points and IMHO a clear sign for a cooling off of the economy.

That said I think Lufty should continue the conversion of the long-haul aircraft with the new Premium Economy product. And thus tsopping the over capacity trend as well the melting down of revenues per seat-kilometre.


But refrain from starting a no-frills carrier with an intercontinental network.

The start of the low-cost carrier seems to have a bad timing and strategy. It takes off purely by coincidence at a moment where major markets are not growing anymore. (No to speak of the disruption scenario of the EU/Greek-exit).

gum

Not much of content found in your contribution.

Would be fine if you would share your opinion about their numbers.

oliver2002

Just read what the FAZ journo had to say about it. My takeaway was they took in 5€ more per pax flown but still made 210 million € loss like the same period last year. And it seems they hedge too, so took a hit on that one. Surprised they did hedge their oil, considering their relatively bad finances last year.

gum

Thanks, oliver2002!

Just to add a quote from their publication of May 11th:

Details can be found here:
http://ir.airberlin.com/dms/investor...h%C3%BCtzt.pdf

So the result per share is again negative and shows the problems and challenges for the Air Berlin group.

In light of that numbers the lack of a sustainable dividend on Lufty's shares (WKN: 823212) seems to be a first world problem.

Page 12 shows a completely different approach respectively assumption on the forward looking expectations on revenue. Air Berlin states:
I think that Lufthansa has a more solid and valid approach an the trend on the "yield front". IMHO the tendency of slightly melting down of fares will continue.

FD1971

A quick summary of AB and LH is always easy.

LH is getting more and more profitable, mainly due to savings resulting from smart management.

AB does not have a working business plan since 20XX and looks like it is managed by some FT Nekkies.

FD1971

GDP growth in the UK has been 2.6% in 2014 vs. 1.6% in Germany for the same period.

Assuming that the old theories are still valid (applying a factor of 2-3) BA should indeed increase capacity faster in comparison to LH.

LH never really added capacity fast, especially in comparison to the US6, for example across the pond during the last upturns.

I do not think that the yields have hit rock-bottom, we still have a lot of (over)capacity in the market. And EK will start new A380 services soon adding to the capacity.

Unfortunately, 'The Flying Dead' are still around and also add capacity, at least in some cases, like AZ (!!) at DUS.

N1003U

This story keeps popping up in the news feeds as if someone thinks it might be significant:

http://www.ch-aviation.com/portal/ne...-index-listing

Aside from a bit of pride at being dumped out of the index calculation, I am not sure why being tossed from the DAX30 (which is in any case still speculation at this point) should have any impact on LH one way or the other, other than an explicit recognition that airlines in general, let me put this politely, do not tend to behave economically in a way that is reflective of the capital markets in general.

Anyone else have an alternate perspective?

gum

Sorry that I only can agree, N1003U, and don't have an alternate perspective.

Being part of the DAX30 or MDAX doesn't have any significance on the performance of the company respectively their ability of refinancing. The DAX30 is regularly reassessed/recalculated with the free-flow of the shaers and the market capitalization as main criterias.

If you look to that recalculation from the positive side this ensures that the index should closely represent the evolution of the market capitalization of the larger companies.

If you have a closer look with the marketing of investments in mind this reassessment is a means of window-dressing showing an as high yield as possible.

For Lufty itself it definitely won't have an impact. In case of emission of new shares or fixed rate securities the long-term perspective is much more important than membership in index one or index two.

The next date of extraordinary volatility of Lufthansa shares is not far away.

The day when a ME investor realizes that his investment in a tiny German carrier is not bearing fruits ah dividends. Then this carrier will partly retract from the German market opening new opportunities for Lufthansa.

Then Lufty will be able to stabilize the prices of its own shares and then will further play an important role within the MDAX.

If Lufthansa wouldn't be longer part of the DAX30 the way back would be very long: In Germany there is speculation of the sale of the Deutsche Postbank from Deutsche Bank. If this entity would be quoted on the stock markets it could pave its way to the indices.

oliver2002

Nice graph in todays Economist espresso:

FD1971

Those statistics are often inaccurate, quite often they only include the revenue kilometers on metal owned by the individual airline, hence all CS/JV flight are not part of the calculation. @:-)

On the other hand, flying A380 on ultra long-haul services is never a bad idea, both when it comes to losing money and when it comes to being on top of those statistics. A win win for EK.

gum

Thanks for that graph, oliver2002, it's really nice!

I think especially the comparison between Lufty and BA is interesting: Both companies have - despite their different strategies - invested in a solid, healthy growth.

I have a very strange association with the numbers of one of the ME3 carriers. Is it only my perception that this COULD be a bubble?