LHs strategy: discussion thread for customers, investors, consultants & armchair CEOs
May 1, 2015, 6:31 am
#2026
Join Date: Mar 2009
Location: GVA,OPO
Programs: BD the last decent FFP
Posts: 1,856
Where we disagree is the "major issues" and "troubles" and what is generating the incremental earning.
It's clear that the improved earnings are pretty much down to fuel expenses.
The rest is LH self-inflicted pain chasing SCORE, talking nonsense on 5:-: while implementing a sub-par product on C/Y cabins and rewarding transactional loyalty.
Earnings indexed to fuel expenses, Revenue flat, Negative FCF as outcome. Good job.
I think you got it reversed. Your blind admiration of LH makes you the Nekkie.
LH could do so much better without this current mindset. Eventually they will realize it.
May 2, 2015, 12:22 pm
#2028
Suspended
Join Date: Aug 2008
Programs: Everything is refundable
Posts: 3,727
There is just a slight difference between criticism on a certain level and some fans shouting from the stands:
Ähhhh, Trainer raus, der kann gar nix, der Franz!!!
May 2, 2015, 10:32 pm
#2029
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
Programs: UA1K, LH GM, AA EXP->GM
Posts: 38,265
May 3, 2015, 12:42 am
#2030
Join Date: Aug 2005
Programs: UA*G(1K), PC Diamond Amb, Marriott Titanium, Accor Platinum
Posts: 4,670
May 5, 2015, 1:18 am
#2031
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
Well this is a positive development. It seems LH is joining some of its peers in taking part in one of the best environments for the aviation sector in a long time: 
*********************
Lufthansa increases first quarter result
Positive development of business in all operating business segments
EBIT and adjusted EBIT 30 per cent above previous year’s quarter
Cash flow from operating activities improves by EUR 539m
The effects of the strike on the result amounted to EUR 42m in the first quarter
High pension obligations due to falling interest rates burden equity
The Lufthansa Group has reported a positive course of business for the first quarter of 2015. At total revenue of nearly 8 per cent higher, the EBIT and adjusted EBIT both rose by EUR 73m. Both key performance indicators were thus 30 per cent higher than in the previous year. The Group closed the first quarter with an adjusted EBIT of EUR -167m (previous year: EUR -240m).
Simone Menne, Chief Officer Finance and Aviation Services of Deutsche Lufthansa AG, says: “All operating business segments were able to increase their results in the first quarter. Above all, SWISS and Lufthansa Cargo have done better than in the previous year. But Lufthansa German Airlines has also shown a positive development, although it was worse hit by strikes and other one-off effects than in the previous year.”
The Group result rose significantly more strongly than the adjusted EBIT in the reporting period. With a plus of EUR 677m in comparison with the same quarter in the previous year, the Lufthansa Group achieved a consolidated result of EUR 425m. An extraordinary effect from the premature exchange of JetBlue swaps made a significant contribution to this development. This transaction alone improved the financial result without an effect on equity by EUR 503m.
The result was once again overshadowed by the consequences of the strike called by the trade union Cockpit among the pilots of Lufthansa German Airlines, Lufthansa Cargo and Germanwings on a total of six days between January and March 2015. Flight cancellations caused by strikes led to a burden on the result of EUR 42m. Due to weaker advance bookings in the following quarters as a consequence of the strike, Lufthansa expects a further burden on the result of EUR 58m.
Cash flows, which are important in view of high total investments, developed positively in the reporting period. Cash flow from operating activities rose to EUR 1,394m (previous year: EUR 855m), the free cash flow improved to EUR 532m (previous year: EUR 195m).
The actuarial interest rate for valuing pension obligations declined further in the first three months of the year, in Germany from 2.6 per cent to 1.7 per cent now. Thus the arithmetic pension burden rose by EUR 3.4bn. This was contrasted with a growth in pension assets of around EUR 500m. The equity ratio fell by 5.7 percentage points to 7.5 per cent now.
“This development shows once again how volatile the key figure ‘equity ratio’ has become since the introduction of the new IFRS accounting standards. We are not alone in this situation. However, other groups have already made the necessary structural change from a cover oriented to a contributions oriented pension commitment. Here, more urgently than ever, we need sustainably financeable solutions in place of obsolete structures. We can only achieve this together with our collective bargaining partners,” says Simone Menne.
Operating costs and income showed strong fluctuations in comparison with the same quarter in the previous year. What was decisive here was the significantly lower oil price, the continuing weakness of the euro and low interest rates. Fuel costs were EUR 209m lower than in the same quarter in the previous year, while expenses on fees went up by nearly 7 per cent, despite the lower number of flights and passengers. The weak euro and the rise in pension expenses also led to an increase in staff costs of nearly 7 per cent.
Simone Menne summarised the interim report for the first three months of the year: “We see positive developments in the result and in cash flow. This shows we are on the right course. At the same time, we continue to see great pressure to act. The enormous pension burdens are putting considerable pressure on our equity. And we cannot accept the continuing increase in fees or the development of our unit costs. Great efforts remain to be made here in order to strengthen the international competitiveness of all the business segments of the Lufthansa Group.”
The interim report for the first quarter of 2015 will be published simultaneously with this press release at 7.30 am (CET) on 5 May 2015 on www.lufthansagroup.com/investor-relations.
Deutsche Lufthansa AG
Media Relations Lufthansa Group
Tel. 069 / 696-2999
Fax 069 / 696-95428
http://www.lufthansagroup.com/media
*********************
Lufthansa increases first quarter result
Positive development of business in all operating business segments
EBIT and adjusted EBIT 30 per cent above previous year’s quarter
Cash flow from operating activities improves by EUR 539m
The effects of the strike on the result amounted to EUR 42m in the first quarter
High pension obligations due to falling interest rates burden equity
The Lufthansa Group has reported a positive course of business for the first quarter of 2015. At total revenue of nearly 8 per cent higher, the EBIT and adjusted EBIT both rose by EUR 73m. Both key performance indicators were thus 30 per cent higher than in the previous year. The Group closed the first quarter with an adjusted EBIT of EUR -167m (previous year: EUR -240m).
Simone Menne, Chief Officer Finance and Aviation Services of Deutsche Lufthansa AG, says: “All operating business segments were able to increase their results in the first quarter. Above all, SWISS and Lufthansa Cargo have done better than in the previous year. But Lufthansa German Airlines has also shown a positive development, although it was worse hit by strikes and other one-off effects than in the previous year.”
The Group result rose significantly more strongly than the adjusted EBIT in the reporting period. With a plus of EUR 677m in comparison with the same quarter in the previous year, the Lufthansa Group achieved a consolidated result of EUR 425m. An extraordinary effect from the premature exchange of JetBlue swaps made a significant contribution to this development. This transaction alone improved the financial result without an effect on equity by EUR 503m.
The result was once again overshadowed by the consequences of the strike called by the trade union Cockpit among the pilots of Lufthansa German Airlines, Lufthansa Cargo and Germanwings on a total of six days between January and March 2015. Flight cancellations caused by strikes led to a burden on the result of EUR 42m. Due to weaker advance bookings in the following quarters as a consequence of the strike, Lufthansa expects a further burden on the result of EUR 58m.
Cash flows, which are important in view of high total investments, developed positively in the reporting period. Cash flow from operating activities rose to EUR 1,394m (previous year: EUR 855m), the free cash flow improved to EUR 532m (previous year: EUR 195m).
The actuarial interest rate for valuing pension obligations declined further in the first three months of the year, in Germany from 2.6 per cent to 1.7 per cent now. Thus the arithmetic pension burden rose by EUR 3.4bn. This was contrasted with a growth in pension assets of around EUR 500m. The equity ratio fell by 5.7 percentage points to 7.5 per cent now.
“This development shows once again how volatile the key figure ‘equity ratio’ has become since the introduction of the new IFRS accounting standards. We are not alone in this situation. However, other groups have already made the necessary structural change from a cover oriented to a contributions oriented pension commitment. Here, more urgently than ever, we need sustainably financeable solutions in place of obsolete structures. We can only achieve this together with our collective bargaining partners,” says Simone Menne.
Operating costs and income showed strong fluctuations in comparison with the same quarter in the previous year. What was decisive here was the significantly lower oil price, the continuing weakness of the euro and low interest rates. Fuel costs were EUR 209m lower than in the same quarter in the previous year, while expenses on fees went up by nearly 7 per cent, despite the lower number of flights and passengers. The weak euro and the rise in pension expenses also led to an increase in staff costs of nearly 7 per cent.
Simone Menne summarised the interim report for the first three months of the year: “We see positive developments in the result and in cash flow. This shows we are on the right course. At the same time, we continue to see great pressure to act. The enormous pension burdens are putting considerable pressure on our equity. And we cannot accept the continuing increase in fees or the development of our unit costs. Great efforts remain to be made here in order to strengthen the international competitiveness of all the business segments of the Lufthansa Group.”
The interim report for the first quarter of 2015 will be published simultaneously with this press release at 7.30 am (CET) on 5 May 2015 on www.lufthansagroup.com/investor-relations.
Deutsche Lufthansa AG
Media Relations Lufthansa Group
Tel. 069 / 696-2999
Fax 069 / 696-95428
http://www.lufthansagroup.com/media
May 5, 2015, 1:41 am
#2033
Join Date: May 2009
Location: SIN (with a bit of ZRH sprinkled in)
Posts: 9,451
Actually, the earnings don't surprise me very much. Underwhelming actually, if you think that:
-Oil is to be had as cheap as not for quite a while, and now even the bad hedging that LH did is expiring slowly
(with full surcharges on both regular as well as award tickets still being high as if oil would be @ 150$)
-Economy is stable in most countries, with positive growth from many countries that LH still has an advantage.
-SCORE etc. is now in the phase where the short-term costs have gone, and the long-term negative impact isn't showing yet (fully) - but no worries, that will catch up soon enough..
If we compare LH's numbers with those of it's major competitors, things don't look all that good.. even Spohr had to admit cashflow might be an issue if your fleet is ageing fast and you should replace it (right now less of a concern due to low oil) - not just for fuel efficency, but also because flying 20+ year old birds are not very attractive for customers (even LH tried to sell the "A380/B748 experience" with special icons.. ) in the public opinion.. obviously, whats inside counts, but many will be set off by "average fleet age: 13.7 years", when EK has half of that (those last two numbers are made up, too lazy to check for the exact ones 
)
-Oil is to be had as cheap as not for quite a while, and now even the bad hedging that LH did is expiring slowly
(with full surcharges on both regular as well as award tickets still being high as if oil would be @ 150$)-Economy is stable in most countries, with positive growth from many countries that LH still has an advantage.
-SCORE etc. is now in the phase where the short-term costs have gone, and the long-term negative impact isn't showing yet (fully) - but no worries, that will catch up soon enough..
If we compare LH's numbers with those of it's major competitors, things don't look all that good.. even Spohr had to admit cashflow might be an issue if your fleet is ageing fast and you should replace it (right now less of a concern due to low oil) - not just for fuel efficency, but also because flying 20+ year old birds are not very attractive for customers (even LH tried to sell the "A380/B748 experience" with special icons.. ) in the public opinion.. obviously, whats inside counts, but many will be set off by "average fleet age: 13.7 years", when EK has half of that
(those last two numbers are made up, too lazy to check for the exact ones )
May 5, 2015, 2:04 am
#2034
Moderator: Lufthansa Miles & More, India based airlines, India, External Miles & Points Resources
Join Date: Dec 2002
Location: MUC
Programs: LH SEN
Posts: 48,158
Fleet Age:
EK:
LH:
BA:
AF:
KL:
I doubt fleet age really plays a role in customer perception. LH and DL for example take really good care that you don't notice age. BA and UA don't give a rats behind on appearance. I've been on EK B772, A332 and A343 that 'looked' much 'older' than they really were.
EK:
Code:
Aircraft Number Age Rank for the age by aircraft type
Airbus A319 1 3.7 years On 129 airlines operating this type of aircraft Emirates ranks 8
Airbus A330 21 14.2 years On 111 airlines operating this type of aircraft Emirates ranks 92
Airbus A340 5 16.4 years On 47 airlines operating this type of aircraft Emirates ranks 25
Airbus A380 60 3.2 years On 15 airlines operating this type of aircraft Emirates ranks 8
Boeing 747 2 7.5 years On 86 airlines operating this type of aircraft Emirates ranks 4
TOTAL 89 6.6 years The calculation of the fleet age can be approximated because it is only based on the supported aircraft
Code:
Aircraft Number Age Rank for the age by aircraft type Airbus A319 30 13.3 years On 129 airlines operating this type of aircraft Lufthansa ranks 106 Airbus A320 67 7.1 years On 242 airlines operating this type of aircraft Lufthansa ranks 104 Airbus A321 64 10.3 years On 82 airlines operating this type of aircraft Lufthansa ranks 49 Airbus A330 19 7.9 years On 111 airlines operating this type of aircraft Lufthansa ranks 59 Airbus A340 42 11.8 years On 47 airlines operating this type of aircraft Lufthansa ranks 12 Airbus A380 14 3.5 years On 15 airlines operating this type of aircraft Lufthansa ranks 10 Boeing 737 20 23.8 years On 248 airlines operating this type of aircraft Lufthansa ranks 129 Boeing 747 35 9.5 years On 86 airlines operating this type of aircraft Lufthansa ranks 11 McDonnell Douglas MD-11 14 15.7 years On 12 airlines operating this type of aircraft Lufthansa ranks 1 TOTAL 305 10.7 years
Code:
Aircraft Number Age Rank for the age by aircraft type Airbus A318 2 5.7 years On 16 airlines operating this type of aircraft British Airways ranks 5 Airbus A319 44 13.3 years On 129 airlines operating this type of aircraft British Airways ranks 105 Airbus A320 71 7.6 years On 242 airlines operating this type of aircraft British Airways ranks 108 Airbus A321 18 9.6 years On 82 airlines operating this type of aircraft British Airways ranks 44 Airbus A380 9 1.5 years On 15 airlines operating this type of aircraft British Airways ranks 4 Boeing 737 5 22.4 years On 248 airlines operating this type of aircraft British Airways ranks 98 Boeing 747 42 19.4 years On 86 airlines operating this type of aircraft British Airways ranks 37 Boeing 767 14 21.2 years On 105 airlines operating this type of aircraft British Airways ranks 60 Boeing 787 8 1.3 years On 30 airlines operating this type of aircraft British Airways ranks 20 TOTAL 213 12 years
Code:
Aircraft Number Age Rank for the age by aircraft type Airbus A318 18 9.9 years On 16 airlines operating this type of aircraft Air France ranks 14 Airbus A319 38 14.4 years On 129 airlines operating this type of aircraft Air France ranks 115 Airbus A320 47 7.9 years On 242 airlines operating this type of aircraft Air France ranks 113 Airbus A321 23 12 years On 82 airlines operating this type of aircraft Air France ranks 56 Airbus A330 15 12.4 years On 111 airlines operating this type of aircraft Air France ranks 87 Airbus A340 13 17.1 years On 47 airlines operating this type of aircraft Air France ranks 27 Airbus A380 10 4.3 years On 15 airlines operating this type of aircraft Air France ranks 11 Boeing 747 6 17.4 years On 86 airlines operating this type of aircraft Air France ranks 30 TOTAL 170 11.4 years
Code:
Aircraft Number Age Rank for the age by aircraft type Airbus A330 17 6.5 years On 111 airlines operating this type of aircraft KLM ranks 48 Boeing 737 Next Gen 48 8.7 years On 215 airlines operating this type of aircraft KLM ranks 105 Boeing 747 25 20.8 years On 86 airlines operating this type of aircraft KLM ranks 48 TOTAL 90 11.6 years
May 5, 2015, 2:24 am
#2035
Join Date: May 2009
Location: SIN (with a bit of ZRH sprinkled in)
Posts: 9,451
Seems I was pretty good with my EK guess then.
Also for LH, you should add LX (definitely older fleet in average at the moment with all those A340s and Jumbolinos.. yes, they'll eventually be retired, but they're saying that for ages
) and OS, probably SN as well. That would probably bring the number up a few years
But yes, of course (and I said it as well), taking care of what's inside an airplane / taking care of the seats is what counts. And while LH group might take care of their airplanes well, it's not like they're all-to-modern inside. LH still flies old C in some of their birds if I'm not mistaken. With their Y class still "featuring" a few 90s style overhead monitors.. LX's A340s are terribly tired in Y (and F), not even having any power plugs (and their A330s, while being ok, are ageing too.. and they'll stay like that in service for apparently 10+ years). And then we've OS, where you get a decent product in Y and a good product in C, but somehow the marketing fails (if you look at their numbers..) to properly sell it. Old birds but new interior apparently is not easy to sell..
Yes, EK also does have some old birds. But those are mostly used on short to mid haul destinations, mostly where there is no competition. The guys in DXB certainly know how to play their game. And while you can get NEKed in LH on flights up to 6 hours or so in C, you always get an acceptable seat with EK even on short jumps. And don't have me starting on the food offered (even though I have to agree that LH C food offering has slightly improved in short haul!)
So all in all, comparing EK with LH is obviously like apple's and orange's, but I feel that at least for SOME pax, fleet age does count for something. If you ask the "less-so-often" flyer if he prefers an airline having shiny new airplanes or 20+ year olds, I'm fairly sure he'll go for the fresher ones. And on average (!), what I get inside the ME3 also beats what I get on average with LH group.
Problem for LH is that while they don't have to fight the ME3 on all routes (China, Japan both being rather lengthy detours, as well as most of Africa, and obviously the Americas) is that they get more frontlines to fight. BA has noticeably upped the game. AF/KLM imho as well. Air Berlin still won't go under (much to the dismay of LH..), and the Russian/Asian carriers like SU, CA, MU are also eating away some shares (besides traditional carriers like ANA or JAL) on those routes that the ME3 can't really compete.
I'd be interested to see on which routes LH group is still making the most money. I would expect it to be mostly on the America routes. And also some from the Chinese/East Asian market, where fares to Europe are on average 30-40% or so higher than when originating in Europe on a similar fare class (if you don't believe me that number, just do a Kayak search for routes like FRA-PEK and vice versa on couple dates both for Y and C) - and those fares will eventually go down, just as I'm not sure how long the Atlantic cartel will survive anymore.
Times are getting tougher for LH, and while parts of SCORE most certainly make sense, others are just going for the wrong way.
LH can't win the price race. But they seem to be going that way more and more.. dropping loyalty aspects will not be good for them, but they've chosen that way.
Also for LH, you should add LX (definitely older fleet in average at the moment with all those A340s and Jumbolinos.. yes, they'll eventually be retired, but they're saying that for ages
) and OS, probably SN as well. That would probably bring the number up a few years But yes, of course (and I said it as well), taking care of what's inside an airplane / taking care of the seats is what counts. And while LH group might take care of their airplanes well, it's not like they're all-to-modern inside. LH still flies old C in some of their birds if I'm not mistaken. With their Y class still "featuring" a few 90s style overhead monitors.. LX's A340s are terribly tired in Y (and F), not even having any power plugs (and their A330s, while being ok, are ageing too.. and they'll stay like that in service for apparently 10+ years). And then we've OS, where you get a decent product in Y and a good product in C, but somehow the marketing fails (if you look at their numbers..) to properly sell it. Old birds but new interior apparently is not easy to sell..
Yes, EK also does have some old birds. But those are mostly used on short to mid haul destinations, mostly where there is no competition. The guys in DXB certainly know how to play their game. And while you can get NEKed in LH on flights up to 6 hours or so in C, you always get an acceptable seat with EK even on short jumps. And don't have me starting on the food offered (even though I have to agree that LH C food offering has slightly improved in short haul!)
So all in all, comparing EK with LH is obviously like apple's and orange's, but I feel that at least for SOME pax, fleet age does count for something. If you ask the "less-so-often" flyer if he prefers an airline having shiny new airplanes or 20+ year olds, I'm fairly sure he'll go for the fresher ones. And on average (!), what I get inside the ME3 also beats what I get on average with LH group.
Problem for LH is that while they don't have to fight the ME3 on all routes (China, Japan both being rather lengthy detours, as well as most of Africa, and obviously the Americas) is that they get more frontlines to fight. BA has noticeably upped the game. AF/KLM imho as well. Air Berlin still won't go under (much to the dismay of LH..), and the Russian/Asian carriers like SU, CA, MU are also eating away some shares (besides traditional carriers like ANA or JAL) on those routes that the ME3 can't really compete.
I'd be interested to see on which routes LH group is still making the most money. I would expect it to be mostly on the America routes. And also some from the Chinese/East Asian market, where fares to Europe are on average 30-40% or so higher than when originating in Europe on a similar fare class (if you don't believe me that number, just do a Kayak search for routes like FRA-PEK and vice versa on couple dates both for Y and C) - and those fares will eventually go down, just as I'm not sure how long the Atlantic cartel will survive anymore.
Times are getting tougher for LH, and while parts of SCORE most certainly make sense, others are just going for the wrong way.
LH can't win the price race. But they seem to be going that way more and more.. dropping loyalty aspects will not be good for them, but they've chosen that way.
May 5, 2015, 2:29 am
#2036
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
I doubt fleet age really plays a role in customer perception. LH and DL for example take really good care that you don't notice age. BA and UA don't give a rats behind on appearance. I've been on EK B772, A332 and A343 that 'looked' much 'older' than they really were.
A few years before they finally sent them to a well deserved retirement in the desert, DL replied to customer comments by simply removing the traditional Douglas Aircraft manufacturing plate that was proudly installed on the webbing inside Door 1L on their fleet of DC-9s (some of which still carried North Central registration numbers). These plates showed clearly the date of manufacture, which in some cases was the 1960s...
On the other hand, aside from being a bit thirsty with fuel, those old DC-9s were fairly robust, had super leg room, and a comfortable 5-across seating arrangement...
I agree LH also does a very nice job, though some of us who ply prime routes like DEN or PHL have noticed a few of the very oldest machines tend to be held together with duct tape and rattle a bit and look a bit ratty during the last few flights leading up to retirement. Compared to some of the oldest machines in other fleets I've flown however, I find LH equipment to be generally very well maintained.
May 5, 2015, 2:40 am
#2037
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
Amongst the relatively good operating news, however, don't forget to go have quick look at the LH balance sheet. The pension liabilities are crushing, and LH's equity ratio is now down in the 8% range (cf. EK, even with all of the crappy operating leases capitalized and thrown in is at about 25%). I think the harsh long-term liability numbers put a better perspective on the management's hard line.
For those who might think it is OK to just give in to the unions holding out to continue the generous (some might say overly so) pension benefits for all pilots, old and young, LH can simply not afford the status quo in the long run. (Unless some other entity taking over the pension liabilities at some in the future, or cutting promised pension benefits is not considered an unfair subsidy...)
For those who might think it is OK to just give in to the unions holding out to continue the generous (some might say overly so) pension benefits for all pilots, old and young, LH can simply not afford the status quo in the long run. (Unless some other entity taking over the pension liabilities at some in the future, or cutting promised pension benefits is not considered an unfair subsidy...
)
May 5, 2015, 3:10 am
#2038
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
http://centreforaviation.com/members...hlights-222860
http://www.wsj.com/articles/lufthans...ale-1430807035
(registration possibly required)
"...The actuarial interest rate for valuing pension obligations declined further in the first three months of the year, in Germany from 2.6 per cent to 1.7 per cent now. Thus the arithmetic pension burden rose by EUR 3.4bn. This was contrasted with a growth in pension assets of around EUR 500m. The equity ratio fell by 5.7 percentage points to 7.5 per cent now.
“This development shows once again how volatile the key figure ‘equity ratio’ has become since the introduction of the new IFRS accounting standards. We are not alone in this situation. However, other groups have already made the necessary structural change from a cover oriented to a contributions oriented pension commitment. Here, more urgently than ever, we need sustainably financeable solutions in place of obsolete structures. We can only achieve this together with our collective bargaining partners,” says Simone Menne..."
“This development shows once again how volatile the key figure ‘equity ratio’ has become since the introduction of the new IFRS accounting standards. We are not alone in this situation. However, other groups have already made the necessary structural change from a cover oriented to a contributions oriented pension commitment. Here, more urgently than ever, we need sustainably financeable solutions in place of obsolete structures. We can only achieve this together with our collective bargaining partners,” says Simone Menne..."
(registration possibly required)
The German carrier on Tuesday reported net profit of €425 million euros ($473 million) compared with a loss of €252 million in the same quarter last year. The airline group benefited from a €500 million gain from the earlier-than-expected sale of shares in Jetblue Airways Corp.
Revenue rose 8% to €6.97 billion, helping shrink the airline’s adjusted loss before interest and taxes for the quarter to €167 million from €240 million last year, better than analysts were expecting...
...Lufthansa said creditors accepted its offer of an early conversion of a €234 million convertible bond in JetBlue stock, issued in 2012 and set to mature in 2017, a move which would help shore up its finances as it continues to upgrade its aircraft fleet...
Revenue rose 8% to €6.97 billion, helping shrink the airline’s adjusted loss before interest and taxes for the quarter to €167 million from €240 million last year, better than analysts were expecting...
...Lufthansa said creditors accepted its offer of an early conversion of a €234 million convertible bond in JetBlue stock, issued in 2012 and set to mature in 2017, a move which would help shore up its finances as it continues to upgrade its aircraft fleet...
May 5, 2015, 3:32 am
#2039
Join Date: Jul 2010
Location: BSL/FRA or PHL
Programs: LH Miles and More, DL SkyMiles, Bonvoy, Hilton
Posts: 2,335
For those who want to dive a bit deeper into the numbers, there are some interesting discussion points here as well (I suppose this report is also available somewhere on the LH investor relations website):
http://centreforaviation.com/files/a...860/1Q2015.pdf
Traffic revenue had a nice jump of 5%, which will be a pleasant surprise at the end of the year if the trend continues.
On the expense side, cheap fuel again was the salvation. Most of the other costs were adversely affected a bit by exchange rates and current pension accruals, but otherwise pretty much flat when normalized for increased sales.
Edit:
As I look a bit more carefully at the core airline business numbers, they are solid, but still not all that rosy. More stable perhaps, but I wouldn't say great.
In the core airline business, revenue increased 5%, while headcount decreased 1%. So employee productivity increased 6%.
But when you look at the costs directly, nothing has really changed much except for fuel.
Yields were up, but so were costs. The ratio of RASK/CASK was off about a point to 0,81 from 0,82. ASK was up while passenger count and number of movements was down, so passengers are taking longer flights.
So the spin is definitely that things are improving, and they probably are, but I am not sure all is rosy yet in LH’s main passenger airline business. LH is holding to their year-end EBIT guidance of 1.5B EUR, but the focus is on the lower end of the guidance range.
http://centreforaviation.com/files/a...860/1Q2015.pdf
Traffic revenue had a nice jump of 5%, which will be a pleasant surprise at the end of the year if the trend continues.
On the expense side, cheap fuel again was the salvation. Most of the other costs were adversely affected a bit by exchange rates and current pension accruals, but otherwise pretty much flat when normalized for increased sales.
Edit:
As I look a bit more carefully at the core airline business numbers, they are solid, but still not all that rosy. More stable perhaps, but I wouldn't say great.
In the core airline business, revenue increased 5%, while headcount decreased 1%. So employee productivity increased 6%.
But when you look at the costs directly, nothing has really changed much except for fuel.
Yields were up, but so were costs. The ratio of RASK/CASK was off about a point to 0,81 from 0,82. ASK was up while passenger count and number of movements was down, so passengers are taking longer flights.
So the spin is definitely that things are improving, and they probably are, but I am not sure all is rosy yet in LH’s main passenger airline business. LH is holding to their year-end EBIT guidance of 1.5B EUR, but the focus is on the lower end of the guidance range.
Last edited by N1003U; May 5, 2015 at 7:08 am
May 5, 2015, 8:17 am
#2040
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
Programs: UA1K, LH GM, AA EXP->GM
Posts: 38,265
And yes DL recently learned that it takes detergents to clean a plane's interior. But I sat on DL birds which looked like set mockups for a post apocalyptic movie.
LH's birdies are indeed quite squeaky clean. I only like the posh appearance of the QF longhaul vessels better. But LH takes greater care of their (remaining) regional fleet.