FD1971

Well, there are some differences.

LH can fully utilize the bird (okay, minus the lavs, they were on the wrong deck), while Etihad, in 110 degree heat, on a very long mission can only fly the bird up to 50% with passengers and an empty cargo deck.

But then Etihad comes up with their joker...the A 346.

San Gottardo

Yikes, how embarassing.

But as long as I make only typos rather than mix up the "+" and "-" in front of numbers I can live with it

FD1971

Only..?

My friend, you redefined aviation management in this forum during the last couple of weeks.

At this point, we have you winning the Bronze medal, being a close runner up to the Bottle, however, our friend gracing the Yuropean skies is winning this competition easily. Unfortunately, he retired on the height of his fame and before losing another seat assignment.

BA was a no-brainer as well, at least if you believed in the Spanish economy coming back.

Same situation over at LH; simply do your homework and wait until the economy is coming back.

Close to 150% gains at LH and triple-digit gains at BA over the last 12-18 months.

Must be a tough time for the naysayers.

P.S.

Regarding the exit; I cannot predict what the stock exchanges will do over the summer, but the demand for the airlines at the moment is a little bit thinner than originally expected and that was already the case shortly before the Ukraine problem started.

Yields are strong, though, demand is strong as well, but a tiny bit less than expected.

TRAVELSIG

It seems we are in for a new Strategy at Lufthansa- strange considering how well everything is going.....:

Deutsche Lufthansa AG (LHA)’s new chief executive officer identified the menace of fast-expanding Gulf carriers such as Dubai-based Emirates as his biggest challenge, threatening to reopen a war of words with Mid-East operators.

Carsten Spohr, who takes over from Christoph Franz as CEO of the German company on May 1, said the emerging long-haul heavyweights represent a different proposition to short-haul discount operators such as Ryanair Holdings Plc.

“Those we can handle, they are on a level playing field,” he told an impromptu press conference at Lufthansa’s annual investor meeting in Hamburg, where he’d didn’t directly address shareholders. “With the Gulf carriers, it’s different.”

Spohr’s comments come after Franz singled out German aviation taxes, night-time runway closures and a European Union emissions levy as among measures making it tough for Lufthansa to compete during his time as chief. The outgoing CEO has also complained that the likes of Emirates directly serve the Gulf’s strategic goals and that Europe should be more forceful.

Spohr, 47, plans to develop his strategy for Cologne-based Lufthansa in fewer than 100 days in time for the traditional July 7 summer break, though there could be some interim announcements very soon, spokesman Andreas Bartels said.



I do suppose though that like most of the other financial journals covering this entity, Bloomberg also knows nothing.

This part seems to be particularly informative given our debate here:

Lufthansa shares have added 22 percent under Franz’s three year, four-month tenure, though they turned positive only after he announced his departure on Sept. 16. British Airways parent International Consolidated Airlines Group SA (IAG) added 48 percent in the period, while Air France (AF) stock declined 20 percent.


http://www.bloomberg.com/news/2014-0...challenge.html

TRAVELSIG

Any data you can share with us on this please? A link would be really great.

FD1971

A 100 day plan, looks like Spohr is using plays from the Berlin play book.

Emirates must be fuming...on one hand they have to reduce capacity already (offically due to construction in DXB) , on the other hand, they still do not get a foot in the Berlin and Stuttgart markets.

(Nearly) all airlines (have to) post official data every month, quarter or so.

This is more than enough for commenting on FT.

Aside from that, you can also buy official reports about Lufthansa and other airlines from analysts like Deutsche Bank, Goldman or even Popova or Ruxana.

San Gottardo

Please quote one of my posts where I mixed up the numbers and provide the correct reading.

I haven't re-defined anything at all. I just asked some questions around some statements that you made which did not seem to tally with the numbers that were published. You couldn't come up with any answers or different readings of the numbers but happily mixed up things like operational profit for the group with operational profit for pax operations, you tried to explain to us that yields went up when the financial reports show that they went down, etc.

I am not the one giving lectures about airline management, that is you. Except that much of it becomes fluff once one asks about some substantiation. I don't even say that all you say is wrong. I happen to agree with most of it. I am not even a naysayer. What is gutting me is you pontificating your wisdom but being evasive once questions are being asked, it's taking a grain of truth and turning it into something enormously wrong. Sure you are right about wrong choices of EY to operate the A346 with load restrictions being not a good idea. It's when this is grossed up to "those idiots with their old four holers" that it becomes absurd. Sure LH has started SCORE from a situation of strength and it is in a much more comfortable situation than the two other big European legacies at the start of their respective programs. But to deduct from this that there was no urgent need for action for reasons that include competitive pressure is an intellectual shortcut. It's your statements about accounting practices at the ME3 where you put all in the same pigeonhole when clearly they are not. Having state backing may not be allowed in Europe (for good reasons), but it doesn't make the accounts in other countries be false. "It's not enough to be right to not be an imbecile" as they say where I come from.

By the way, the audience is still waiting for His Expertise's reading of what the Handelsblatt published? When some including me posted a similar analysis on March 13th you didn't really pick up on those points. So we were wrong, Handelsblatt is wrong? But you are right? I am not saying that you are not, but give us REASONS and SUBSTANCE. Not just gospel.

gum

http://investor-relations.lufthansag...-2014-03-d.pdf

Page 3 delivers comprehensive information about the seat load factors respectively the capacity utilization.

Which looks great for Lufthansa exactly like FD1971 reported before.

Additionally I would like to add two personal opinions and observations.

1.) One of the competitors of Lufthansa now "celebrates" his 35th jubilee with astonishingly low fares of 35 Euro one-way within Germany and on some short-haul routes. For me this is like a desperate attempt to get cash, regardless if these bookings deliver a margin or not.

This is an evidence for the weakness of one competitors of Lufty and I wouldn't be surprised if we will see a capacity decrease of this Berlin/England based competitor. And then generating new demand for short-haul travel on famous and commonly admired market leaders like Lufthansa. ^

Text in clear: The downwards spiral on AB will continue and in the long-run a much smaller company *may* survive. Thus said it will provide feeder traffic to Etihads hubs in Germany.

2.) We will see many fully booked LH flights in the future due to the fact that the seat factor in the high 70s percentages doesn't allow to allocate the high number of the then (former) AB passengers.

San Gottardo

Lovely. Someone trying to tell us how great revenues are developing sends a link with a document whose title in big fat letters is "Lower sales in March".

Agreed, that does not mean that load factors are low, but in terms of first impression that may not be what you want to achieve.

But still, let's look at the facts. Your friend said "Yields are strong, though, demand is strong as well, but a tiny bit less than expected."

According to the paper you sent, demand actually went down by 3.3%. (Remember, plus means more and minus means less? This is one says -3.3%)

Also the seat load factor went down by 2.6%.

And there is no information about yields.

There are some perfectly understandable reasons for these numbers, and LH mentions some of them. Also FD may still be right that current demand is strong and yields are strong etc. But the LH publication you linked to so that his argument has some substance actually shows the opposite.

In the short run there may indeed be a revenue and demand uptick for LH. However, I would like to hear from others if the following scenario is possible: AB leaves the market. LH gets the bulk of the business in the short run. However, with one player gone others may find the German market even more attractive. Easyjet has a much better cost structure than AB and may try to attack. In which case LH will have rid itself of AB but then has to face U2. Is that a more attractive prospect?

TRAVELSIG

Next time how about sending a link that doesn't showing traffic and fares decreasing?

gum

Indeed the yearly comparision shows an upwards trend. If you fairly compare this numbers with the different calender of this and the last year in mind it is pretty clear. The high demand for Easter holidays in 2013 was within the first quarter of the year (Easter Sunday on March 31st)! In this year much of this traffic is allocated within April (Easter Sunday on April 20th, 2014).

A seasonal smoothing indeed shows that this - is indeed a +! Don't know why the investor relations department of Lufthansa didn't clearly states this fact themselves.

I completely agree that a market entry of U2 would in theory be possible.

But let me concentrate on inner-German routes at the first glimpse:

- A new competitor in the German market at least needs 14 aircrafts of the Boeing B737 size in order to compete with hourly or 2-hourly connections between major German cities.

This would be exactly the number of aircrafts which was used when Deutsche BA started their epic journey with impressing the customers with friendliness and service.

- The new competitor would really need a quiet environment aka Lounge for the high-yield business travellers regardless if they should buy high Economy fares or a "Club type" class with 2-3 seating.

- If he is not able to win a large government contract to/from Berlin he will feel fully booked planes on Friday-Monday and off-peak the rest of the week.

- Feeders of this new U2 to Frankfurt in order to get some revenue from Star Alliance connex pax would face the challenge that the distance for schlepping the baggage from T1 to T2 and back is very long. Especially if it is a low-cost carrier not offering baggage through-check to other airlines.

IMHO the dwarfed AB will consist of main holiday routes (aka "Mallorca Shuttle"), some long distance services on demand (in order to feet the cruise ships like Aida & Co.) and a low number of intercontinental destinations (formerly known as LTU).

In consequence Lufthansa will on the long run face the challenge that the nowadays short-haul fleet which offers too many seats will be to small for the future.

If you assume a low but steady growth path the A321 package size will be too small for some shorthaul-connections. As the A 300/A 310 is no longer available we may see a short-haul A340.

SMK77

Too bad that's not true for Lufti. I see sheer desperation in the eyes of senior managers when asking about advance booking numbers. The seat load factor in March has also seen LX at 5% over LH. Can LH increase RASK in 2014? I would not hold my breath.

gum

I see a higher RASK in 2014 for Lufthansa itself. ^ This year will see the full impact of the introduction of the "leisure" fares for F and C class and thus supporting the trend towards serving the discerning leisure traveller and upselling them to buying more square feet per segment.

Introduction of the New C Class e.g. on the A 380 will only cost 6 seats per frame and thus be overcompensated by the high attractiveness of the brand new C class.

Downside:
And a slightly decrease on the s/h routes which have to suffer from all the measures of the germanwingsization.

TRAVELSIG

The New C Class is not completed until 2016 and only brings Lufthansa group close to par with their competitors who have offered a lay flat product for ten years already. Note this is a FIVE YEAR role out of a product that was behind schedule when it was tested SEVEN YEARS ago and that was the feedback already provided at that time apparently/rumored to be.

If LH is counting on this to bring their share back I think it is going to be a very tough time- in addition while keeping the GCC out of Germany with a fairly high level of success- the continuation of routes bypassing altogether a Germany connection for passengers who are not originating nor terminating their trips in Germany is going to continue to weigh very heavily on results.

And lastly- as noted by Bloomberg today- why the rush to have a new strategy within the next 100 days if things are going so well?

GBM.flights

wow... what a disconnect.

On RASK this was LH 2014 outlook according to the annual report (and Q1 shows the trend)


Demand:
Q1 delivered +0.5% pax. To stick to the outlook they'll now need >6% growth for the remainder of the year.