Lufthansa (FRA:LHA)

QUOTE AND NEWS
Clusterstock  Jun 10  Comment 
Airlines have been under increased public scrutiny in recent months, following an incident in which a United passenger was violently removed from an overbooked flight. But a top German carrier wants to give fliers something to smile...
Biomass Magazine  Jun 9  Comment 
Researchers at the German Aerospace Center, Lufthansa Technik and the Bundeswehr Research Institute for Materials, Fuels and Lubricants, recently investigated the chemical and physical properties promising biofuels in an airline turbine.
Flightglobal  Jun 7  Comment 
Lufthansa chief executive Carsten Spohr warns that expanding a controversial ban on electronics on US-bound flights will result in major disruptions for the airline industry.
Reuters  Jun 5  Comment 
Demand for Lufthansa flights is better than expected this year, with traffic from the United States and Asia developing well, the carrier's chief executive said on Monday.
Benzinga  May 26  Comment 
Travelport Worldwide Ltd (NYSE: TVPT) and Sabre Corp (NASDAQ: SABR) plunged Friday as two European airlines announced new fees on tickets purchased through global distribution systems, which facilitate booking transactions between travel services...
The Hindu Business Line  May 5  Comment 
New routes, new aircraft is the India mantra, says German carrier’s Asia-Pacific V-P
Channel News Asia  Apr 21  Comment 
Lufthansa and Air France were briefly hit by computer problems preventing them from boarding passengers on Thursday evening, airport and airline staff said on Thursday.




 

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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