Category Archives: Lufthansa Cargo

Lufthansa Group achieves adjusted EBIT of 2 billion euros in a difficult economic environment

Lufthansa Group issued this statement:

  • Outlook 2020: magnitude of the expected decline in adjusted EBIT currently not predictable 
  • Corona crisis: Comprehensive savings measures throughout the Group including: far-reaching capacity reductions, ”short-time working” mechanism in home markets and suspension of dividend 
  • Flight schedule for relief flights until 19 April
  • In addition over 140 special flights planned and operated until now
  • Executive Board waives 20 percent of basic remuneration

Carsten Spohr, Chairman of the Executive Board of Deutsche Lufthansa AG:

“The spread of the coronavirus has placed the entire global economy and our company as well in an unprecedented state of emergency. At present, no one can foresee the consequences. We have to counter this extraordinary situation with drastic and sometimes painful measures. At the same time, we must live up to the special responsibility that airlines bear in their home countries. We are doing everything we can to bring as many passengers as possible home on relief flights. In addition, we are doing our utmost to help ensure that supply chains for many thousands of businesses do not break down by mobilising additional capacity for air freight transport. The longer this crisis lasts, the more likely it is that the future of aviation cannot be guaranteed without state aid. In view of the massive impact of the Corona crisis, today’s publication of our results for the past financial year is unfortunately sidelined.”

The most important key figures of the 2019 annual financial statements have already been reported in an ad hoc announcement on 13 March.

At 2.0 billion euros, the adjusted EBIT of the Lufthansa Group was in line with the forecast despite considerable charges. The main drivers for the decline were a 600 million euro increase in fuel costs and a noticeable economic slowdown, especially in the Group’s home markets. Earnings development was also impacted by high price pressure in the European market due to overcapacity and the weakening of the global airfreight market. Lufthansa Group revenue in 2019 rose by 2.5 per cent to 36.4 billion euros (previous year: 35.5 billion euros). The adjusted EBIT margin was 5.6 per cent (previous year: 8.0 per cent). Consolidated net profit fell by 44 per cent to 1.2 billion euros (previous year: 2.2 billion euros).

Unit revenues of the passenger airlines in the Group fell by 2.5 per cent in 2019, adjusted for exchange rate effects, in particular due to the overcapacity in the Lufthansa Group’s home markets. At the same time, unit costs adjusted for fuel and currency effects were reduced by 1.5 per cent in 2019, the fourth year in succession.

In 2019, the Lufthansa Group invested 3.6 billion euros (previous year: 3.8 billion euros), a large part of which in new aircraft. Adjusted free cash flow fell to 203 million euros (previous year: 288 million euros) due to lower profits and higher tax payments. Return on capital employed (adjusted ROCE) after taxes decreased to 6.6 percent (prior year: 10.8 percent).

At year-end, interest-bearing net liabilities amounted to 4.3 billion euros. Including lease liabilities of 2.4 billion euros recognized for the first time as a result of the application of IFRS 16, net debt thus amounted to around 6.7 billion euros (prior year: 3.5 billion euros). Pension liabilities rose by 14 percent to 6.7 billion euros (previous year: 5.9 billion euros), mainly due to the lower interest rate used to discount pension obligations, which fell to 1.4 percent (previous year: 2.0 percent).

In order to secure its strong financial position, the Lufthansa Group has raised additional funds of around 600 million euros in recent weeks. In actuarial terms, the Group thus has liquidity of around 4.3 billion euros. In addition, there are unused credit lines of around 800 million euros. Further funds are currently being raised. Among other things, the Lufthansa Group will use aircraft financing for this purpose.

“The Lufthansa Group is financially well equipped to cope with an extraordinary crisis situation such as the current one. We own 86 per cent of the Group’s fleet, which is largely unencumbered and has a book value of around 10 billion euros. In addition, we have decided to propose to the Annual General Meeting that the dividend payment be suspended, and we are proposing short-time working in our home markets,” said Ulrik Svensson, Chief Financial Officer of Deutsche Lufthansa AG.

The Lufthansa Executive Board also decided yesterday to waive 20 per cent of its basic remuneration in 2020.

Corona crisis: Drastic cuts in Lufthansa Group flight operations / numerous special relief flights planned and carried out

Due to entry restrictions in many countries and a collapse in demand, the Lufthansa Group was forced to make drastic cutbacks in its flight operations. Air Dolomiti conducted its last flight for the time being on 18 March. Today the last regular scheduled flight of Austrian Airlines landed in Vienna. With the exception of special flights, Austrian Airlines is suspending its flight operations until 28 March. Brussels Airlines will not be offering any regular flights in the period from 21 March to 19 April. 

Lufthansa is discontinuing its long-haul operations in Munich and will initially only offer long-haul flights from Frankfurt. Swiss will offer only three weekly long-haul flights a week to Newark (USA) in addition to a substantially reduced short- and medium-haul schedule. Lufthansa’s short-haul program will also be substantially reduced further, and only Lufthansa CityLine services will be operated from Munich. From the hubs in Frankfurt, Munich and Zurich, only a few European metropolitan areas will be served. The relief flight schedule runs until April 19 and only provides for a total of about five percent of the originally planned program. Around 700 of the Lufthansa Group’s 763 aircraft will be temporarily parked.

In order to bring as many people as possible back home quickly, Lufthansa Group airlines are also operating numerous special relief flights around the world. This is also possible due to the unparalleled support and solidarity of the crews as well as ground staff, who at a moment’s notice volunteered their assistance.

In close consultation with the governments of their home countries and on behalf of tour operators, Lufthansa Group airlines are currently offering around 140 special relief flights. More than 20,000 passengers are thus flying home with Lufthansa, Eurowings, SWISS, Austrian Airlines, Brussels Airlines and Edelweiss. The figures alone include the special flights that were firmly planned until yesterday. Numerous other special flights will follow in the next few days.

In addition, the Lufthansa Group is making every effort to ensure that supply chains in Germany and Europe do not come to a standstill. Lufthansa Cargo continues to fly its regular program, except for cancellations to mainland China, keeping the entire freighter fleet in the air. This currently consists of seven Boeing 777Fs, six MD-11Fs and four 777Fs from Aerologic. In addition, the company is currently examining the possibility of using passenger aircraft without passengers as pure cargo aircraft in order to further increase cargo capacity.

Lufthansa Cargo aircraft photo gallery:

Lufthansa Cargo to accelerate the retirement of its MD-11Fs

Lufthansa Cargo McDonnell Douglas MD-11F D-ALCB (msn 48782) FRA (Marcelo F. De Biasi). Image: 943189.

Lufthansa Cargo will significantly accelerate the modernization of its fleet by purchasing two more brand-new Boeing 777F freighters. Lufthansa Group and Supervisory Board have approved the corresponding investments. The aircraft will be delivered by the manufacturer in 2020 and be based in Frankfurt.

The ten older MD-11 freighters, which have already been partially replaced by Boeing 777F this year, are expected to be withdrawn from the fleet by the end of 2020.

Due to the higher cargo capacity and range, the same freight performance can be achieved in the future with noticeably fewer aircraft movements. Overall, Lufthansa Cargo’s customers will have the same freighter capacity at their disposal at the end of the rollover as they had at the beginning when eighteen MD-11Fs were in operation for Lufthansa’s cargo arm. In addition to its own fleet, Lufthansa Cargo can also utilize the cargo capacity of four Boeing 777Fs operated by AeroLogic.

Lufthansa Cargo first put the eye-catching MD-11F three-jet aircraft into operation in 1998 because of its efficiency advantages. It replaced the four-engine jumbo freighters until 2005. The twin-engine Boeing 777F is now around 20 percent more efficient and emits less CO2 than the MD-11F. In addition, the new model meets the strict noise protection requirements of ICAO Annex 16, Volume I, Chapter 14.

In addition to its own fleet, Lufthansa Cargo also markets the belly hold capacities of Lufthansa German Airlines, Austrian Airlines, Brussels Airlines, Eurowings and SunExpress. In total, around half of the cargo is carried in passenger aircraft’s belly holds.

Top Copyright Photo: Lufthansa Cargo McDonnell Douglas MD-11F D-ALCB (msn 48782) FRA (Marcelo F. De Biasi). Image: 943189.

Lufthansa Cargo aircraft slide show:

Lufthansa Cargo to introduce a new BMW logo jet

Lufthansa has made this announcement on social media:

LH Cargo B777F “Foxtrot Echo” (D-ALFE) departs on a trip around the world in a few days with a unique branding. Its freight? The #VisioniNext by @BMW, the future of automotive design. Let us know if you spot it on the way from @MUC_Airport to JFK, SFO and PEK.

Top Image: Lufthansa Cargo.

Below Copyright Photos: Lufthansa Cargo Boeing 777-FBT D-ALFE (msn 41678) (BMW Vision Next) MUC (Arnd Wolf). Image: 943477.

Lufthansa Cargo's 2018 "BMW Vision Next" promotional livery

Lufthansa Cargo aircraft slide show:

Video:

Lufthansa Group orders 16 additional aircraft

Lufthansa Cargo Boeing 777-FBT D-ALFE (msn 41678) YYZ (TMK Photography). Image: 938090.

The Supervisory Board of Deutsche Lufthansa AG has approved the order of up to 16 additional aircraft. The list price of the aircraft is approximately 2.1 billion euros. Delivery is scheduled to take place in stages until 2022. The investment plan for the 2018 fiscal year remains unchanged.

The order includes two Boeing 777-300ER long-haul aircraft for Swiss.

Photo: Lufthansa Group.

An additional two Boeing 777F freighters (top) will be ordered for Lufthansa Cargo. The modern freighter aircraft will replace MD-11 cargo planes in the future.

The Supervisory Board has also approved the order of up to twelve short- and medium-haul A320-type aircraft. This includes six delivery options for aircraft of the Airbus A320neo (new engine option) type in 2022 that were converted to fixed orders. When they are delivered, they will replace older aircraft in the flight operations of the Lufthansa Group. Depending on availability, up to six additional A320ceo (current engine option) will be ordered. The plan is to deploy them at Lufthansa this year already, in order to offset delivery delays for Airbus A320neo aircraft.

Top Copyright Photo: Lufthansa Cargo Boeing 777-FBT D-ALFE (msn 41678) YYZ (TMK Photography). Image: 938090.

Lufthansa Cargo aircraft slide show:

Lufthansa Cargo increases freighter services to Japan with new service to Osaka

Lufthansa Cargo Boeing 777-FBT D-ALFB (msn 41675) JFK (Ken Petersen). Image: 925187.

Lufthansa Cargo has increased its freighter services to Japan and added two weekly freighters to Osaka, Japan (KIX). The additional flights complement the already existing daily freighter from and to Tokyo-Narita as well as the Lufthansa passenger flights to Osaka-Kansai, Tokyo-Haneda, and Nagoya.

The new route is operated from Frankfurt via Novosibirsk to Osaka on Wednesdays and Fridays, and adds to a total of 80 weekly flights into and out of the country – including the belly capacity on Lufthansa passenger aircraft and the carriers cooperation capacity with ANA Cargo. The first flight from Osaka took off on  January 18 at 11:36 pm (local time) with 90 tons of cargo on board.

Copyright Photo: Lufthansa Cargo Boeing 777-FBT D-ALFB (msn 41675) JFK (Ken Petersen). Image: 925187.

Lufthansa Cargo aircraft slide show:

Lufthansa Group assigns wide body aircraft to Berlin routes

Lufthansa Boeing 747-430 D-ABVR (msn 28285) FRA (Marcelo F. De Biasi). Image: 939653.

Lufthansa Group has made this announcement:

In order to fulfil the unusually high current demand for tickets from Berlin to Frankfurt, Munich, Zürich and Vienna, three airlines of the Lufthansa Group (Lufthansa, Swiss International Air Lines, Austrian Airlines) will replace the usually scheduled short-haul aircraft with wide-body aircraft for a short-term in October. In addition, all other scheduled flights from these hubs to Berlin will almost all be flown with the largest short-haul aircraft of the Lufthansa Group (Airbus A321) during the period from October 23-25.

With the use of the larger aircraft, far more passengers can be transported, so that as many travel wishes of Berliners can be fulfilled as possible. The extended flights from Berlin have been scheduled to enable passengers to conveniently reach many global transfer flights of the Lufthansa Group airlines via the airports Frankfurt, Munich, Zürich and Vienna.

Lufthansa is thus offering a daily flight from Frankfurt to Berlin with an Airbus A340-300 from October 23-25, 2017. From Munich, there will be an Airbus A340-600 flight once a day from Munich from October 23-24, 2017.

Swiss is planning to replace one flight from Zürich to Berlin with an Airbus A330-300 on October 24-25, 2017.

Austrian Airlines will use a Boeing 767 from Vienna to Berlin on October 24, 2017.

The cabin equipment of the wide-body aircraft is the same as for any long-haul flight of the Lufthansa Group airlines. The service will also be the same as that offered by Lufthansa, Swiss and Austrian Airlines in the respective travel class for flights to and from Berlin.

The use of larger aircraft for this period are not the only measures taken by the airlines in the Lufthansa Group to cope with the strong demand and the pending shut down of Airberlin. In September, Lufthansa had already decided to use a Boeing 747-400 during high-peak times from Frankfurt to Berlin. The jumbo has thus visited Tegel more than 60 times.

In addition, Lufthansa will connect Berlin and New York four times a week from November 8, 2017.

Copyright Photo: Lufthansa has been operating the Boeing 747-400 between Frankfurt and Berlin (Tegel). Lufthansa Boeing 747-430 D-ABVR (msn 28285) FRA (Marcelo F. De Biasi). Image: 939653.

Airberlin sells Niki and LGW to Lufthansa

Niki-The Spirit of Niki (flyniki.com) Airbus A320-214 OE-LEX (msn 2867) ZRH (Rolf Wallner). Image: 922611.

Airberlin issued this statement on October 12, 2017:

Air Berlin PLC and Air Berlin PLC & Co. Luftverkehrs KG have reached an understanding with Deutsche Lufthansa AG on October 12, 2017 that entities of the Deutsche Lufthansa group will acquire certain business units from entities of the Air Berlin group, including in particular NIKI Luftfahrt GmbH as well as Luftfahrtgesellschaft Walter mbH (LGW). The combined purchase price of approximately EUR 210 million will be subject to adjustments upon closing of the transaction.

The transaction is, amongst others, subject to regulatory approvals.

The negotiations with easyJet Airline Company Limited and other bidders, in each case in respect of different units of the Air Berlin group, are still continuing.

Lufthansa issued this statement:

After intense negotiations over the past few weeks, Deutsche Lufthansa AG and the Air Berlin Group have signed a contract on October 13, 2017 regarding the purchase of NIKI Luftfahrt GmbH (NIKI) and Luftfahrtgesellschaft Walter mbH (LGW).

These two carriers are projected to increase the capacity of the operational fleet at Eurowings as follows:

LGW with 870 employees, as well as 17 Bombardier Dash 8 Q400 and 13 Airbus A320 aircraft
NIKI with 830 employees, as well as 20 Airbus A320 type aircraft

This means that the wet-lease operation that is currently still provided for Eurowings by Air Berlin Group will be taken over by Eurowings’ own operational fleet. Eurowings also plans to acquire additional aircraft on the market and hire 1,300 more employees.

Eurowings remains the fastest-growing airline in Europe

“Our strategic modernization initiatives have paid off. We have regained the capacity to invest and grow, in order to play an active role in the consolidation of the European airline market with Eurowings. As the fastest-growing airline in Europe, Eurowings can now expand the range of services it offers customers,” says Carsten Spohr, Chairman of the Board of Directors at Deutsche Lufthansa AG.

Eurowings expands its market position in Germany and Europe

The fleet marketed by Eurowings (program fleet) is projected to grow from 160 to 210 aircraft with the finalization of the transaction and purchase of additional aircraft, with 189 short- and medium-haul aircraft and 21 long-haul aircraft, making Eurowings the third-largest in European point-to-point traffic. The number of flight operations will grow to a total of eight, including the aircraft operated by TUIfly and Sun Express on a wet-lease basis. With its platform concept, Eurowings is oriented towards the integration of flight operations and is predestined to actively advance the consolidation of the European aviation market.

At the same time, the number of employees is expected to grow from currently around 7,000 to roughly 10,000. Eurowings has approximately 50 new short-haul and medium-haul connections planned for the summer of 2018 and – not related to the transaction with Air Berlin – additional long-haul connections in North Rhine-Westphalia, Berlin and Munich. The airline will be growing particularly strongly at these locations. Eurowings is anticipating a total of 80,000 additional flights and 12 million additional passengers per year. This would increase the point-to-point traffic sales volume of the Lufthansa Group by up to 40 percent. Eurowings is expanding its competitive position in the German and European market with this. It will be able to produce at competitive costs with the acquired capacity and generate positive profit contributions as soon as the integration is complete.

The finalization of the transaction is subject to approval by the relevant committees and the competition authorities. Lufthansa expects the transaction to be finalized by the end of the year.

Top Copyright Photo: Niki-The Spirit of Niki (flyniki.com) Airbus A320-214 OE-LEX (msn 2867) ZRH (Rolf Wallner). Image: 922611.

Bottom Copyright Photo: Airberlin (airberlin.com) (LGW) Bombardier DHC-8-402 (Q400) D-ABQI (msn 4264) ZRH (Andi Hiltl). Image: 907142.

Airberlin (airberlin.com) (LGW) Bombardier DHC-8-402 (Q400) D-ABQI (msn 4264) ZRH (Andi Hiltl). Image: 907142.