Germany: Lufthansa Group Increases Result In Business

Adjusted for restructuring costs and non-recurring effects, the Lufthansa Group increased its profit in the first nine months of 2013 by around 47 per cent, or EUR 278m, to a total of EUR 859m. The reported result for the first nine months of the year came to an operating profit of EUR 661m, against EUR 907m in the previous year.

The Group was able to keep revenue steady at EUR 22.8bn, despite fewer passenger and cargo flights. Non-recurring effects also had an impact on the net profit for the period. This fell by EUR 450m to EUR 247m. “We have significantly improved earnings in the passenger business. For the first time in five years, we are in the black with Lufthansa’s European traffic – thanks to the progress with Germanwings.

Austrian Airlines has also returned to profitability. Our progress is confirmation of the fact that, strategically, we are on the right track. It also serves to motivate us to develop our strengths further”, said Christoph Franz, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG, when presenting the results for the first nine months.

The Score program, launched in February 2012, is having a clear effect. In the passenger business, the Group increased the load factor of the aircraft by managing capacity in closer alignment with seasonal demand. Outside of the two main hubs in Frankfurt and Munich, European routes to and from Germany were transferred to Germanwings, which has already had a very positive effect on the nine-month result.

Adjusted for non-recurring effects and lower fuel costs as a result of lower volumes, costs fell by 0.9 per cent across the Group, while revenue remained stable. This corresponds to EUR 171m. The passenger airlines in the Group cut unit costs, i.e. costs per available seat-kilometre (CASK), by a total of 1.2 per cent for the period from January to September. Unit costs even fell by 1.8 per cent once the reduction in fuel costs was factored in.

Lufthansa German Airlines, which includes Germanwings, contributed a positive operating result of EUR 300m to the business segment’s profit in the first nine months of 2013, an increase of EUR 189m over the same period last year. Swiss generated an operating profit of EUR 182m, which was EUR 9m more than in the previous year. Austrian Airlines achieved a profit of EUR 19m for the first three quarters and increased its normalized result by EUR 11m. The previous year’s result of EUR 210m included positive non-recurring effects from the transfer of operations from Austrian Airlines to Tyrolean.