Deutsche Lufthansa AG (FRA:LHA) is a German airline with five business segments: scheduled passenger air traffic, scheduled airfreight services, maintenance, repair and overhaul (MRO), information technology, and catering.
Lufthansa operates the following airlines: Deutsche Lufthansa AG, Lufthansa CityLine GmbH, Swiss International Airlines AG, Austrian Airlines AG, British Midland Ltd., Air Dolomiti S.p.A., Eurowings Luftverkehrs AG, and Germanwings GmbH.
Lufthansa's operating profit came to €876 million in 2010, more than five times higher than in 2009. Lufthansa's net profit for 2010 was €1.1 billion. Lufthansa's sharp increase in profitability is due to the combination of strong sales in international passenger traffic and cargo and cost-cutting measures.
Lufthansa logistics and cargo segment benefited from the global economic recovery and the recovery of German exports. Lufthansa's logistics business segment reported an increase in revenue of 43% to €2.795 billion in 2010.
German exports surged in March 2011 to the highest monthly value ever recorded. Exports jumped 7.3 percent from February 2011, when they gained 2.8 percent. Exports were worth €98.3 billion ($141.4 billion) in March.
Germany’s economic recovery is broadening as companies boost investment and hiring to meet booming export demand from Asia. The recovering German economies is boosting demand for Lufthansa's cargo services, which allow exporters to ship freight by air.
The German government has levied a €1 billion ($1.3 billion) per year tax on the air travel industry in Germany as part of a package of budget cuts and taxes. The air travel tax is expected to raise airfares by €8-16 per ticket. German airports body ADV has predicted that air traffic in Germany could drop by as much as 3% as passengers seek cheaper tickets in France, Belgium, Poland, and Germany's other neighbors. Lufthansa's CEO has said that the entire tax cannot be passed onto the consumer, which has increased its costs while also reducing its revenues due to the increase in airfares.
Lufthansa competes with both European airlines that offer many flights throughout continental Europe, such as Air France ADS (AKH), as well as with international airlines outside of Europe offering flights to Germany, such as American Airlines (AMR) and Delta Air Lines Inc. (DAL).