eponymous_coward

Especially here on FT.

Lack

So is paying low prices for that top quality product a German thing then? That doesn't bode well for LH finances I'd guess?

FD1971

You got it. ^

And despite these dire circumstances, they were still able to earn some 10 billion over the last 20 years, paid their taxes, paid their employees decent wages, did not lay off people by the thousnads and did not dip into the Chapter 11 pool etc.

Maybe, this is the greatest achievement in the history of management, probably even mankind.

IAN-UK

Demanding, no doubt: but for many travellers that's within an environment defined and limited by corporate travel agreements, and the comforts of cultural familiarity.

Lack

Nope, I don't get it. With the worlds best managed airline logic I'd assume that they provide the lowest quality product at the top price.

GBM.flights

They let them go by the dozens of hundreds?

NYC1

Yes, European shorthaul used to have 3 classes, Y and C were the same seats (e.g., 3+3 in each row on a 737) without the blocked one in the middle and F was 2+2. I'm talking 70s, 80s.

gum

An agree! And not to forget the widebody aircraft A300/A310 with 2-2-2 in First and 2-4-2 in European Business and European Economy.

My first widebody flight ever ^ due to a Summer promotion offer for families with fathergum, motherGum and gum flying with one full fare F and two family tickets. ^ Brothergum not interested in such a short hop intra-Germany.

I was very impressed also by the fact that Lufty at that time had postcards for every type of a/c vastly available in the timetable rackets in front of every cabin zone.

And then back to the comparatively tiny B737....

NYC1

I remember those postcards fondly.

N1003U

Well, the 3Q numbers are out, and it looks like The Crane had a good summer.

LH seems to have filled planes with what appear to be paying passengers. We'll see what the full-year brings, but it is nice to see the indicators moving in the right direction. I haven't looked very deeply at the numbers yet, but it does look like some good financial news, with traffic revenue up 5%.

The balance sheet is not yet anywhere close to its historic impressiveness, but some cuts to capital spending combined with continued good operating results, which is usually good for the cash flow. One quarter doesn't make a trend, but after 2.5 years of flatness and watching the rest of the industry go by, some good news in encouraging. It is good to see LH at least keeping up with the market again (OK, at least not getting much further behind).

The revenue growth outstripped the capacity growth, and that LH seem to have gotten 5% more revenue out of only 2% more passengers over the same period last year is probably a good sign.

kamel123

I am less than impressed by the Q3 figures.

RASK ex-currency -3.3% YTD (-1.9% for Q3), and CASK ex-currency ex-fuel +0.8% YTD (+1.1% for Q3). Or, in simple terms: If you strip out the very favorable currency and fuel price effects, costs continue going up, while revenues continue going down.

Personnel costs are again up +6.7% YTD/Q3 ex pensions. Doesn't seem to be under control.

N1003U

Excellent points, especially the personnel costs, which are stubborn, and I don't think are going away.

I was feeling generous today and took the report on its face numbers after reading the first page and what I have heard about traffic this summer and gave LH credit for posting some good numbers for a change.

It does seem clear that after years of cost cutting, the costs are not going to be brought under control in any meaningful way that will not affect the top line revenue. The base of operation simply does not allow it.

To me it is interesting is that planes are really full, and the traffic market is not bad right now, yet there seems to be trouble pulling in a premium on the premium product. It makes me sort of wonder: is this is as good as it gets for LH (at least under the current strategy)?

While it is not really all that material in the grand scheme of things, I did note a quick mention that consultancy fees paid were up 37million this year, so at least someone is benefitting more this year from LH operations.

kamel123

Probably that's as good as it gets, if you ask me.

If anything, I was surprised by the tonality of the Q3 presentation. It seems like an attempt to tell a positive story - profit up, point-to-point airlines profitable, new premium cabins installed leading to yields above plan.
A more balanced presentation would have created a better basis to extract concessions from pilots and other in the ongoing/upcoming negotiations.

And, hardly anyone seems to believe them anyway: the stock is down more than 8% so far today...

N1003U

I agree: when you look back over the past few years, there is less talk recently from LH management about being the center of the aviation universe and expanding to conquer the known world from Mesopotamia to northern Britannia.

Getting kicked around a bit works wonders for your modesty.

I think the market reaction if a bit much, myself, but I think you are right: upon more careful analysis, the good news is not all that great.

I am more interested to see how Q4 bookings hold up, as some carriers are apparently starting to warn about soft bookings for Q4.

YuropFlyer

13.02 EUR -1.27 EUR -8.86 %

Guess the stock market has realized that it's fairly easy to present good numbers when your #1 cost factor has dropped by roughly 40% (in Euro, more in most other currencies) YOY

http://www.indexmundi.com/de/rohstof...12&wahrung=eur