Lufthansa (FRA:LHA)

QUOTE AND NEWS
Channel News Asia  Aug 18  Comment 
Union representatives of insolvent Air Berlin's Austrian unit Niki Airlines said its future was unclear and they hoped for support from the Austrian government if it runs out of money.
Flightglobal  Aug 18  Comment 
Canadian investigators have disclosed that a passenger's electrical power bank was the source of a fire in the cabin of a Lufthansa Airbus A380 operating to Houston.
Reuters  Aug 17  Comment 
A first round of formal talks for the sale of insolvent German airline Air Berlin's assets will be held with its bigger local rival Lufthansa on Friday, ahead of other prospective bidders, a senior labour union official said.
The Hindu Business Line  Aug 16  Comment 
IBS Software, an IT solutions provider to the global aviation industry, has set up a ‘test factory’ for Lufthansa Cargo to ensure all its application software are fit for purpose and meet the quality...
BBC News  Aug 16  Comment 
Ryanair accuses Lufthansa and the German government of colluding to carve up the failed airline.
Reuters  Aug 16  Comment 
Ryanair sees any plans by Lufthansa to take over parts of insolvent rival Air Berlin as a "conspiracy" to halt the Irish carrier's expansion, its chief executive told Reuters.
The Hindu Business Line  Aug 14  Comment 
Celebrating the spirit of Indian entrepreneurship, Lufthansa has begun the search for the country’s most innovative small and medium enterprises (SMEs) in Bengaluru. The search jointly organised wi...
The Economic Times  Aug 8  Comment 
Lufthansa Cargo Chief Executive Officer and Chairman of Executive Board Peter Gerber also said that growth in the market was returning.
Flightglobal  Aug 4  Comment 
Lufthansa Technik intends to restructure its German line maintenance operations in a bid to cut the unit's costs by 25%.




 

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.

Business Growth

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.[1] Lufthansa's sharp increase in profitability is due to the combination of strong sales in international passenger traffic and cargo and cost-cutting measures.

Trends and Forces

Rising German exports help Lufthansa's logistics business

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.[2] 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.[2]

Germany’s economic recovery is broadening as companies boost investment and hiring to meet booming export demand from Asia.[2] The recovering German economies is boosting demand for Lufthansa's cargo services, which allow exporters to ship freight by air.

German air travel tax cuts into Lufthansa's revenues

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.[3] 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.[3] 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.

Competition

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).

References

  1. Lufthansa Annual Report 2010
  2. 2.0 2.1 2.2 Bloomberg: "German Exports Surged to Record $141.4 Billion in March, Boosting Growth" May 9, 2011
  3. 3.0 3.1 Reuters: "German air travel tax overshadows IATA meeting" June 8, 2010
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