Category Archives: Lufthansa

Lufthansa to offer “restaurant service” in Business Class

Lufthansa Restaurant Service

Lufthansa (Frankfurt) has issued this statement about its new “Restaurant Service”:

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From August onwards, passengers in the Lufthansa Business Class can look forward to a completely new service on board long-haul flights. The flight attendants will now adapt their service more strongly towards the rhythm of their passengers in order to individually respond to their guests’ needs and requests just like a top-class restaurant. After the flight attendants have welcomed ‘their’ guests on board in person and by name, they take their orders and set the table with ceramic crockery. Meals are then served directly from the galley. Trays and flight trolleys are replaced by service plates.

After the introductory flights in June and July on the Airbus A380 routes to New York (JFK) and Miami, the restaurant service will now be launched on the A380 services to Houston, Johannesburg, Los Angeles, Miami, Delhi, New York (JFK), Beijing, San Francisco, Shanghai, Seoul and Singapore from 1st August onwards. The service will then be introduced on flights with the Boeing 747-400 and 747-8 from Frankfurt on October 1 and the Airbus A340 fleet from Frankfurt and Munich to Asia and the Middle East on October 25.

Special service training courses for around 4500 flight attendants have already been running since May this year. The around 130 flights on which the new concept has already been tested received an extremely positive response from Business Class guests. With its new restaurant service, Lufthansa is taking another important step towards becoming the first five-star airline in the Western hemisphere.

Photo: Lufthansa.

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Lufthansa Group improves its financial results for the first half of 2015

Lufthansa Group (Lufthansa) (Frankfurt) today issued this financial report for the first half of 2015. The group produced a profit of €954 million ($1.0 billion) for the first six months of 2015, compared to a loss of €79 million ($86.3 million) in the same period a year ago. Here is the group’s report:

Lufthansa Group logo

The Lufthansa Group reports solid business development for the first half of 2015 and improved results in all of its operating segments. The Adjusted EBIT (Earnings Before Interest and Tax) rose by EUR 290 million year-on-year to EUR 468 million. For the six months ended June 30, sales increased by 8.5 percent to EUR 15.4 billion, with traffic revenue accounting for EUR 12.1 billion of that figure.

Yields for the Lufthansa Group’s passenger airlines rose by 2.4 percent in the first half of 2015, which was mainly exchange rate related. Had it not been for the tailwind from a weaker euro, however, yields would have been appreciably lower, in line with expectations.

In the second quarter alone, yields declined by 5.7 percent after adjusting for exchange rate effects. Although unit costs as a whole also rose mainly as a result of currency exchange rates, the EUR 309 million reduction in fuel costs coupled with improved sales and capacity utilization more than compensated for the reduction in prices. All currency effects in the first six months net to a total negative impact of EUR 158 million. The net effect is negative as Lufthansa Group has higher costs in foreign currencies, among others due to fuel spending in US Dollar, compared to the revenue side in foreign currencies.

The Group’s net result for the first six months of the year rose to EUR 954 million, compared with a net loss of EUR 79 million for the same period in the prior year. In addition to a higher operating result, this is mainly due to the increase in the financial result. More than half of the Group’s net result was attributable to an accounting effect resulting from the appreciation in equity capital of EUR 503 million following the redemption of the jetBlue convertible bond in the first quarter. In the second quarter, assessments of interest and exchange rate hedging instruments as well as fuel hedging options had a positive impact, increasing the result by a total of EUR 176 million.

Simone Menne, Chairman of the Financial and Aviation services of Deutsche Lufthansa AG said:

“Our first-half results are solid. Aside from the positive development of our business operating areas and, in particular, our passenger airlines, which gained extra momentum in the second quarter, the fall in fuel costs is largely responsible for the improvement in our results. We will, however, not be misled by that, since we assume that the price level for airline tickets will not recover. We will therefore continue to work consistently on the competitive focus of the Lufthansa Group.”

Swiss new logo

In the second quarter, the Lufthansa Group achieved an Adjusted EBIT margin of 7.6 percent. Lufthansa Passenger Airlines and, in particular, Swiss played a crucial role in this positive development. The Passenger Airline Group recorded a margin of almost 8 percent in the second quarter, with Swiss, with a margin of over 11 percent, posting an exceptionally good result – also in comparison to others in the sector.

 

 

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Germanwings also remains on a successful course, and will close the current year in profit for the first time.

Simone Menne:

“Our strategic focus is right. On the one hand, our premium brands – Lufthansa and Swiss – are very successful, and at the same time Germanwings and Eurowings are also showing good business developments as secondary brands. We are focusing on the premium quality of our hub airlines and the high level of competitiveness of our secondary brands in point-to-point traffic. This approach makes us profitable and fit for the future within the airline market”.

In the first half year, Lufthansa Passenger Airlines improved its result by EUR 181 million, Swiss by EUR 90 million, based on an Adjusted EBIT of EUR 178 million.

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While Austrian Airlines reported a loss of EUR 17 million in the first half-year, it managed to increase the Adjusted EBIT by a solid EUR 27m compared with the previous year.

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However, in the second quarter, Lufthansa Cargo was unable to maintain its good performance of the first quarter. With the introduction of the summer timetable, Lufthansa Cargo’s competitors significantly increased their freight capacity in many markets, thereby placing prices under increasing pressure. Eventually, the logistics segment achieved an improvement of EUR 7 million in the Adjusted EBIT to EUR 50 million in the first half-year.

The other business segments also managed to improve their half-year results:

Lufthansa Technik by EUR 41 million to EUR 268 million and LSG SkyChefs by EUR 17 million to EUR 26 million.

The equity ratio rose again to 17.5 percent at the end of the second quarter due to the higher actuarial interest rate and the resultant decrease in pension provisions. The ratio was therewith higher than for the full-year 2014. Although pension liabilities declined as a result of the 2.9 percent increase in the actuarial interest rate, at EUR 6.6bn overall pension liabilities still remain at a very high level.

Simone Menne: “With regard to pension liabilities and equity, it can also be said that developments throughout the second quarter have been positive, even if they were strongly driven by external factors. The need for sustainable structures in our pension scheme and transitional pension arrangements remains unchanged, nevertheless. The ambitious investment program to which we are committed to in the coming years is part of our strategy to ensure our sustainability. In order to generate the necessary funds we need the right conditions in all the business areas and companies within the Lufthansa Group.”

In the first half, operating cash-flow rose by almost 45 percent to EUR 2.5bn. At the end of the first half-year, a free cash flow of just over EUR 1bn was reported – almost double that of the previous year. Against this background, net indebtedness decreased substantially by 31 percent compared to the full-year 2014.

As planned, capital expenditure rose year-on-year. Amongst other things, the delivery of two further Airbus A380s and four Boeing 747-8s as well as the modernization of First and Business Class on the long-haul fleet and the installation of the new Premium Economy Class were contributory factors. Gross expenditure in 2015 will total EUR 2.9 billion. For the following years, a decline in the level of investment to EUR 2.5 billion is planned.

Lufthansa confirms its outlook for the full-year 2015 with an Adjusted EBIT of more than EUR 1.5 million before strike costs.

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Lufthansa is approaching the retirement of its remaining Boeing 737 fleet (Boeing 737-300s and 737-500s). The Classic 737 is likely to be retired by the end of the year depending on schedule demand although this remains fluid. Boeing 737-330 D-ABXL (msn 23531) taxies at Zurich.

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Lufthansa introduces its new fare concept for Europe

Lufthansa (Frankfurt) today issued its anticipated announcement on its on-going refinement of its travel options in Europe:

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Effective July 28, 2015, Lufthansa is introducing a new price concept for flights in Europe. The new Economy Class fare options “Light”, “Classic” and “Flex” shall apply from October 1, 2015, for domestic and European flights and will offer different services depending on the price. For example, within Economy Class, passengers can select services according to their individual wishes. The booked fare can be complemented with additional services by individually adding further options.

Jens Bischof, Member of the Lufthansa German Airlines Board and Chief Commercial Officer (CCO) of Deutsche Lufthansa AG, said: “It is the wish of many customers to only pay for the services they actually make use of. With this new fare concept, we are doing just that. In the future, given this flexibility, every passenger will be able to individually create a tailor-made flight with the various service components that we are offering. The price options, Light, Classic and Flex, are more transparent and allow customers in Economy Class a selection of fare options within Europe.”

The new fare concept is being introduced during the course of the Lufthansa sales strategy realignment. The various fare options differentiate themselves in the areas of free luggage, seat reservations, as well as rebooking and cancellations options. The choice will now consist of a fully flexible Business Class fare and three new Economy Class fares.

In addition to the actual flight itself, all of the fare options include one piece of hand luggage, snacks and drinks on board, a reserved seat at check-in from 23 hours before take-off, as well as Award, Status and Select Miles. The fare options and services included are presented transparently. For bookings in Economy Class, all three fare options are always available. Thus, different option packages can be combined on an outward and return flight. Additional services, such as seats with more legroom or an upgrade to Business Class, can be booked separately at any time, even after ticket purchase.

The new Europe fares of Lufthansa at a glance (click to expand):

Lufthansa European Pricing Options

The new fares at a glance (click to expand):

Lufthansa new fares at a glance

Economy Light

The new Light fare will, from 1 October, be the most economical option for those traveling only with hand luggage and not in need of any ticket flexibility. Jens Bischof said: “To date, about a third of our passengers travelling within Europe only take hand luggage”. The Light fare can be booked from only 89 Euro for a return flight. No rebooking or refund is possible with this option. If desired, customers can additionally book a piece of luggage (from 15 Euro for the outbound and return flight respectively) or book a seat (from 10 Euro per flight) at any time between booking and start of the journey.

Economy Classic

The Classic fare includes the opportunity to check-in a piece of luggage of up to 23 kg. This option also offers a new, additional opportunity for many passengers to secure their desired seat, free-of-charge, at booking. Finally, the Classic fare is more flexible than the Light fare because it can be rebooked to another flight on the original connection for a fee. The Classic fare can be booked from 129 Euro for a return flight.

Economy Flex

The Flex fare is focused principally on passengers that require more flexibility in their travel planning. In addition to the free seat reservation, the Flex fare offers the opportunity to rebook the flight at no extra cost or change the itinerary. If the originally planned booking class is no longer available, it is possible that an extra payment is necessary. In this fare option, frequent fliers will get an additional 50 per cent of Premium Miles credited in the framework of a Miles & More promotion. The extra cost of the Flex fare as compared to the Classic fare is between 60 and 160 Euro, depending on route.

Business Class

Besides the three Economy fares, there continues to be a Business Class fare which includes all the usual services and conveniences of this travel class, such as access to the lounge, increased luggage allowance of 2 x 32 kg, seat reservation and an open seat next to it, and priority boarding. The novelty is the full flexibility in rebooking and cancellation. Thus, in the new price concept, all Business Class fares will be re-bookable without a fee and refundable free-of-charge. If the originally planned booking class is no longer available, an extra charge may be necessary under certain circumstances. The Business Class fare is the premium offer and especially suitable for business customers and discerning leisure travelers. The Business Class fare is available from only 399 Euro for a return flight.

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Lufthansa is introducing the new fare concept together with Austrian Airlines.

Swiss new logo

Swiss has already used the new concept since the end of June.

Brussels Airlines logo

Brussels Airlines introduced a fare concept with various options in 2014. The fare concept for long-haul flight tickets remains unchanged.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Lufthansa’s Airbus A320-214 D-AIZX (msn 5741) departs from Toulouse.

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Lufthansa and Germanwings are assuming the long-term social care for the relatives of the victims of flight 4U9525

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Lufthansa Group has issued this statement:

Lufthansa and Germanwings are assuming also the long-term responsibility for the outcome of the crash of the Germanwings flight 4U9525. Thus, in particular, children and teenagers who have lost one parent or both parents shall receive support for their education on the long-term. For this purpose a fund of up to €7.8 million shall be made available on a fiduciary account.

Furthermore, an aid fund is being set up, which shall, over a term of three years provide individual support for aid projects of the relatives. Project funds shall be available in the sum of up to €2 million per year. Projects that are related to the victims are those being promoted. A Board of Trustees has been contracted to decide on the fair distribution of the funds, and shall be employed over the coming months.

Besides the financial support memorials shall be set up in four locations affected by the tragedy over the coming months. A commemorative plaque shall be set up at Barcelona airport and at the company headquarters of Germanwings in Cologne. In the vicinity of the location of the crash in Le Vernet a “room of silence” is planned. For the victims from Haltern trees have already been planted on the wish of the bereaved.

The relatives of the victims and their lawyers shall be informed on further compensation over the next few days. As a first step, Germanwings and Lufthansa have paid off an advanced compensation in the amount of €50,000.00 to close relatives.

Lufthansa reaches the 100th Airbus A320 Family aircraft milestone with its voluntary sound-reducing vortex generators

Lufthansa (Frankfurt) has issued this statement about reaching the 100th aircraft in its noise reduction program:

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Experts from Lufthansa Technik will be equipping the 100th aircraft of the Lufthansa A320 fleet with sound-reducing vortex generators (below) in the next few weeks. The Lufthansa Group and German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt, DLR) project is part of the research group “Quieter Transport” (“Leiser Verkehr”), has thus reached an important milestone. Since November 2014, Lufthansa has equipped its short and medium-haul aircraft of the types Airbus A319, A320 und A321 with the noise-reducing components on the underside of the wings.

Lufthansa sound-reducing vortex generators

Photo Above: Lufthansa. The vortex generators being installed on the LH Airbus A320 Family fleet.

 

It is the first airline in the world to do so.

In total, 157 aircraft in the short and medium-haul fleet are being equipped with a vortex generator. Newly built Airbus aircraft have already been delivered to Lufthansa with the sound-reducing technology since the beginning of 2014. More than 200 Lufthansa jets will fly much more quietly in future.

Flyover measurements taken by Lufthansa in cooperation with the DLR show vortex generators remove annoying tones and significantly reduce the overall noise level of the aircraft when landing – by up to four decibels at distances of between ten and 17 kilometers away from the airport.

According to information from the manufacturer, this effect is even greater further away from the airport. These tones were previously created by airflows over circular pressure equalisation vents for the fuel tanks on the underside of the wings during flight. The new components generate an air vortex over the pressure equalisation vents for the fuel tanks that effectively prevent these tones from being created.
This measure is part of the Hessian “Noise Protection Alliance“, which was agreed by the state government of Hesse and the airline industry.

MD-11 measurement flights made by Lufthansa Cargo in Magdeburg-Cochstedt

Equipping or converting the A320 fleet is one of the most extensive voluntary measures for active sound reduction undertaken by Lufthansa to date.

A further possibility to significantly reduce aircraft noise will be intensively tested in the next few weeks in flyover measurements over several days at Magdeburg-Cochstedt airport with two MD-11 freight aircraft from Lufthansa Cargo. Modified sound suppression has been installed on the engine intakes of the General Electric CF6-80C2 engines. In the MODAL project, sponsored by the German Federal Ministry for Economic Affairs, Lufthansa has already carried out investigations on a Lufthansa Technik engine test bench in Hamburg together with the DLR. This first step produced the main evidence that the so-called Hardwall Acoustic Panels in the engine intake have a noise-reducing effect. Now, in the second step, the effectiveness of the panels under real conditions is being investigated. In addition, Lufthansa expects findings to be made about reductions in landing gear noise achieved by covering the cavities in the aircraft landing gear.

During the flyover measurements at Magdeburg-Cochstedt, the aircraft approaches the airport several times, as if it were landing, and then overflies the airport several times in a certain configuration. Other constituents of the measurements programme are take-off flights with ground measurements at various engine revolution levels. Numerous microphones on the ground record the sound of the aircraft flying at different heights during every flyover. The measurement data will form the basis for possible approval of the modification for the existing Lufthansa Cargo MD-11 fleet.

The most important measure for reducing flight noise is continual investment in new aircraft. The Lufthansa Group will receive a total of 259 aircraft of the latest generation by 2025. Thus in future, 59 state-of-the-art aircraft – 34 Boeing 777-9Xs and 25 Airbus A350-900s – will supplement the long-haul fleet of the Lufthansa Group. The A350-900 will already be delivered from 2016. The noise emissions of the new models are considerably lower than those of today’s aircraft.

Copyright Photo: Andi Hiltl/AirlinersGallery.com. Airbus A320-214 D-AIZP (msn 5487) prepares to touch down in Zurich.

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Boeing to cut the 747-8 production rate to only one aircraft per month

Boeing (Chicago, Seattle and Charleston) has announced it will cut the 747-8 Intercontinental production rate by 23 percent from 1.3 aircraft to only one aircraft starting in March 2016 according to Reuters quoting Boeing sources. The company is currently building 1.5 aircraft per month and this was planned to be reduced to 1.3 in September despite a recent order by the Volga-Dnepr Group.

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Copyright Photo: Royal S. King/AirlinersGallery.com. Lufthansa has always been a keen supporter of the 747 and pushed Boeing for the updated 747-8 model. Lufthansa’s Boeing 747-830 D-ABYT (msn 37844) in the 1968 retro scheme lands at Paine Field near Everett.

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Air France-KLM, easyJet, IAG, Lufthansa Group and Ryanair call for a new EU Aviation Strategy

European Union flag

The CEOs of Europe’s five largest airline groups – Air France-KLM, easyJet, International Airlines Group (IAG), Lufthansa Group and Ryanair – met collectively for the first time today (June 17) and agreed to work together to lobby for the development of a new EU Aviation Strategy that will support growth and jobs across Europe, strengthen the sector and give Europe’s passengers lower fares and more choice.

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The meeting took place (in Brussels) in response to the new EU Transport Commissioner Violeta Bulc’s consultation on a new EU Aviation Strategy. The five agreed a vision for this strategy that would match the revolution in aviation that the liberalization of Europe’s airline sector created a generation ago, through the creation of the internal aviation market.

easyJet (UK) 2015 logo

The five airlines identified four measures that would support the Commission‘s objectives of enhancing the competitiveness of the European air transport industry both at European and international level, supporting growth and jobs across Europe and which would help consumers through the provision of more flights and lower fares.
These measures are:

The development of an EU Aviation strategy with a plan for a simple efficient regulatory structure, which would strengthen the competitiveness of European airlines, ensure jobs and growth through innovation (e.g. Horizon 2020), protect consumer interests and promote more efficiency to reduce costs.

Lowering the cost of the EU’s airports by ensuring that monopoly airports are effectively regulated; ensuring that passengers receive the full benefit of the commercial revenues which they create at airports; and that security charges are efficient. This could be achieved by reforming the Airport Charges Directive.

Delivering reliable and efficient airspace by reducing the cost of ATC provision; ensuring that ATC strikes do not cause disruption to passengers across Europe; resetting the Single European Sky strategy by focusing on using new technology to make efficiency savings; and using SESAR funding to drive compliance with the Single Sky framework.
Stimulating more economic activity and jobs by creating the right regulatory environment, removing passenger taxes and unreasonable environmental taxes.

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The five CEOs – Alexandre de Juniac, Carolyn McCall, Willie Walsh, Carsten Spohr and Michael O’Leary – outlined their vision:

“Europe’s airlines form the most competitive sector in aviation with a diverse mix of carriers offering competition and choice to consumers.This is the first time we have set aside our competitive battles to highlight the importance of a new European Aviation Strategy.

The liberalization of aviation in Europe in the 1990’s, creating a fully liberalized single market with a comprehensive common regulatory framework 18 years ago, strongly enhanced competition across Europe.As a result, consumers have benefited with substantially lower fares and more routes across Europe and to the rest of the world. At the same time, EU airlines have maintained leading safety standards. The range and quality of services have increased and airline costs have fallen by 1 – 2% per year for the last two decades.

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We believe that this decline should now be matched by a reduction in those costs which airlines do not control themselves. “As the new Transport Commissioner prepares a new Aviation Strategy for Europe she must drive more competition, encourage more efficiency and help reduce costs in other parts of our industry (such as monopoly airports and Air Traffic Control providers) and reduce the tax burden on passengers.”

Aviation is a proven driver of economic growth and jobs. The proposed measures will create many hundreds of thousands of jobs – particularly for young people, at a time of high youth unemployment in countries such as Italy or Spain – and increase Europe’s GDP. The group will write to the EU Transport Commissioner Violeta Bulc asking for these measures to be put in place.

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Alongside the proposed policy positions the five CEO’s confirmed their support for several key principles and action items which should underpin EU aviation policy. The most important of these is the commitment to safety and ensuring that safety standards are developed based on a risk based scientific assessment.

The CEOs confirmed their support for the liberalization of the whole aviation value chain and for pro-competition policy and regulation within the EU. They also confirmed their opposition to the provision of State-aid, as a general principle, to airlines and airports. They agreed that EU and national regulation and policies should support the efficient delivery of services, and that this includes the need for efficient operations to minimise the environmental impact of aviation. The importance of balanced consumer rights was also underlined; EU and national policies need to ensure that consumer rights are respected.

The CEOs agreed to work together to encourage the Commission and EU member states to take up the proposed measures. The five airlines agreed that airline representation in Brussels today is not as effective as it could be – with six airline representative organisations – and agreed to explore possible forms of future representation.

The five airlines between them carried a total of 420 million passengers in 2014, accounting for half of the passenger journeys in Europe.