Lufthansa soars with 44% gain
Lufthansa, the German airline, on Wednesday night said that it had increased its operating profits by 44 per cent last year from E723m to E1.04bn ($948m), its second best result after the record year of 1998.
The jump in operating profits exceeded the 40 per cent increase forecast by the group last November but was slightly lower than market expectations.
The strong performance is expected to add to the difficulties the group is facing in its wage negotiations for its 55,000-strong workforce.
Lufthansa pilots tabled demands this year for increases in total remuneration packages of between 30 per cent and 80 per cent. It warned last month that the demands were “utopian” and said “a settlement of this dimension would do massive harm” to the group.
According to provisional figures released last night Lufthansa pre-tax profits rose 22 per cent to E1.22bn, while group turnover was up 19 per cent to E15.2bn.
The Lufthansa group carried close to 47m passengers last year, a year-on-year increase of 7.4 per cent. Mainline passenger volumes rose by 6.1 per cent to 41.3m, while the Lufthansa CityLine regional carrier increased its passenger traffic by 17.3 per cent to 5.7m.
The airline achieved a record utilisation of its aircraft capacity, selling more than 74 per cent of its seats for the first time, despite an increase in overall capacity, and succeeded in raising its market share among European airlines.
The current financial year has also started strongly with passenger volumes rising by 11.9 per cent in January and exceeding the 7.7 per cent increase in capacity.
The European Commission on Wednesday gave initial clearance to Lufthansa’s joint venture with British Midland (BMI) and Scandinavian Airlines (SAS), after the carriers agreed to concessions on the London Heathrow-to-Frankfurt route.
The airlines, which are all members of the Star global airline alliance, have offered to give up enough slots for four daily flights between Heathrow and Frankfurt if requested to do so by a new entrant. If no new entrant appears, the other incumbent, British Airways, could apply for slots at Frankfurt for three daily services.
The trilateral agreement covers joint marketing, pricing and revenue sharing on about 20 routes out of Heathrow and Manchester to Scandinavia and Germany. The venture also covers BMI’s other 18 routes from Heathrow to cities such as Brussels, Madrid, Milan and Amsterdam, as well as its UK domestic services.
Final Commission approval will mark a step-change in the dynamics of the single European aviation market.
Lufthansa, which has enjoyed antitrust immunity since 1996 for its bilateral alliance with SAS on routes between Germany and Scandinavia, is looking to extend similar co-operation agreements with its European Star partners elsewhere.
