Franz: “We don’t have the level of profitability we need”
Lufthansa Group reports today that it generated an operating result of €628 million for the first nine months of 2012. That’s €96 million less than in the first nine months of last year. Profits were hit particularly hard by record fuel prices, the airline says, while persistently intense price pressure, Germany’s air traffic tax and the costs of EU emissions trading certificates have also impacted on earnings.
“Despite strong headwinds, the Lufthansa Group has generated a respectable result, especially in comparison with the rest of the industry,” Christoph Franz, Deutsche Lufthansa AG’s chairman of the executive board and CEO, comments. “The earnings contributions from our service segments were particularly helpful. The first projects in our SCORE [restructuring] programme are also having an effect. We are making progress on the costs within our control. However, that is not enough to earn adequate margins.”
Revenues increased in the group by 6.1% to €22.8 billion and the net profit for the period (€474 million) was 64.6% higher than the previous year, a result characterised by one-off effects. Positive effects included the sale of bmi, which lost money last year, and the restructuring of Austrian Airlines. With the decision to merge Lufthansa’s decentralised traffic outside the hubs in Frankfurt and Munich under the Germanwings brand, the airline forecasts that “the stage was set for a return to profitability in this segment”.
[pictured: A Lufthansa A380 starts for the first time from the new Terminal A-Plus in Frankfurt, due to fly to San Fransisco, 10 October 2012; courtesy Lufthansa]