Tag Archives: Germanwings (2nd)

Will Lufthansa retire the Germanwings brand earlier?

Lufthansa (Frankfurt), in the wake of the tragic crash of Germanwings (2nd) (Cologne/Bonn) flight 4U 9225 in the French Alps, is facing some tough decisions on the future of its low-cost subsidiaries. Before the crash, Lufthansa was planning to gradually phase out the Germanwings brand and shift a number of routes to the new Eurowings (Dusseldorf) low-cost brand.

According to Airline Route, on October 25, 2015, a total of 55 Germanwings routes  (and the 4U code) operating from Cologne/Bonn, Dusseldorf and Hamburg were due to be transferred to Eurowings and the EW code.

The Germanwings brand was expected to be gradually phased out with no end date specified. However with this tragic loss and the now apparent criminal act, will Lufthansa close out the tarnished Germanwings brand sooner?

Lufthansa has touted the success of its low-cost subsidiaries. Is this strategy now in jeopardy with the tragic loss of Germanwings flight 4U 9225?

Fortune explores this question: CLICK HERE

Top Copyright Photo: The current red and orange brand was introduced with much fanfare in 2012. Airbus A319-112 D-AKNT (msn 2607) taxies at London (Heathrow).

Germanwings aircraft slide show: AG Airline Slide Show

Bottom Copyright Photo: Arnd Wolf/AirlinersGallery.com. The ill-fated Airbus A320-211 D-AIPX (msn 147) is pictured taxiing at the Cologne/Bonn hub in the previous 2002 yellow and maroon livery.

Current route map from Cologne/Bonn:

Germanwings 3.2015 Route Map

Breaking News: Brice Robin: The Germanwings First Officer “accelerated the descent” in a “deliberate attempt to destroy the aircraft”

Germanwings #indeepsorrow

Brice Robin, Marseille Public Prosecutor, has just held a live press conference in Marseille (Marselles in English), France. According to the prosecutor, First Officer Andreas Lubitz, 28, a German citizen, intentionally locked the cockpit door and locked out the Captain. According to the prosecutor, the First Officer “accelerated the descent” to “deliberately attempt to destroy the aircraft”. The First Officer was heard to be breathing normally, eliminating the medical emergency theory.

Screams were heard by passengers at the end as the Airbus A320 slammed into the mountain.

150 people died in the tragic crash.

Since the accident is now an apparent crime, the BEA (Bureau d’Enquêtes et d’Analyses pour la sécurité de l’aviation civile), the Police and the Public Prosecutor will continue the investigation.

BEA logo

French investigators reach the Germanwings crash site, all 150 dead, weather is an issue today

Germanwings #indeepsorrow

French investigators reached the rugged mountain crash site of Germanwings flight 4U 9525 late yesterday afternoon (March 24). All 150 people on board are dead including 67 Germans and 45 Spaniards. The remains of the crashed Airbus A320-211 D-AIPX (msn 147) is scattered on the mountainside in the French Alps as the airliner smashed into the mountain located between Digne and Barcelonnette, France.

None of the remains have been recovered due to the harsh weather conditions today. Snow is forecasted for the remote area today.

The priority today will be the recovery of the remains.

Lufthansa and Germanwings called for a minute’s silence today at 10.53 a.m. to commemorate the victims of 4U 9525.

According to Airbus, the ill-fated A320-211 (D-AIPX, msn 147) was “delivered to Lufthansa from the production line in 1991. The aircraft had accumulated approximately 58,300 flight hours in some 46,700 flights. It was powered by CFM 56-5A1 engines.”

According to CNN, “The cockpit voice recorder recovered from the crash site is damaged, but officials will be able to reconstruct it in the coming hours, French Interior Minister Bernard Cazeneuve told French radio station RTL.”

The flight data recorder is reportedly still missing.

There was no distress call from the cockpit.

Read the full report from CNN: CLICK HERE

Lufthansa, on behalf of its subsidiary Germanwings, issued this statement:

We must confirm to our deepest regret that Germanwings Flight 4U 9525 from Barcelona to Düsseldorf has suffered an accident over the French Alps. The flight was being operated with an Airbus A320 aircraft, and was carrying 144 passengers and six crew members.

Lufthansa and Germanwings have established a telephone hotline. The toll-free 00800 11 33 55 77 number is available to all the families of the passengers involved for care and assistance.
Everyone at Germanwings and Lufthansa is deeply shocked and saddened by these events. Our thoughts and prayers are with the families and friends of the passengers and crew members.

“We do not know exactly what happened to Flight 4U 9525. Our thoughts are now with all the relatives and friends of our passengers and crew. We will do everything possible in order to provide further information.”

Carsten Spohr

Meanwhile, Lufthansa’s pilots have called off for now any further strikes against Lufthansa or Germanwings.

Video: Raw footage of the crash site:

 

Germanwings is coming back to Berlin Schonefeld

Germanwings (2nd) (Cologne/Bonn) is coming back to Berlin (Schoenefeld). The low-fare subsidiary of the Lufthansa Group will resume the Cologne/Bonn – Berlin (Schoenefeld) route on October 5. The airline will also serve the Stuttgart – Schoenefeld route starting on October 25. Ryanair has announced it will start a new base at Schoenefeld as we previously reported.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Airbus A320-211 D-AIQM (msn 268) with Wickie, the Viking man (new 3D TV series), approaches the runway at Tenerife Sur.

Germanwings aircraft slide show: AG Airline Slide Show

Germanwings-Eurowings banner

Video:

AG Building a better website

 

Lufthansa Group completes the transfer of non-hub routes to Germanwings

Lufthansa Group (Frankfurt) has issued this statement:

The Lufthansa Group has made a successful start to the new year with the transfer of the Düsseldorf–Zurich route from Lufthansa to Germanwings (2nd) (Cologne/Bonn) today (January 8, 2015). One of the biggest structural projects ever undertaken by the company has thus been successfully completed on time.

The concept of the new Germanwings was presented in December 2012, followed by the market launch on July 1, 2013.

The transfer of the Düsseldorf–Zurich route means that the decision to operate all domestic and European routes under Germanwings, apart from at the Frankfurt and Munich hubs, has now been fully implemented as scheduled.

In all, Germanwings has taken over 115 routes from Lufthansa in recent months, with the biggest number of routes (52) at Düsseldorf Airport.

The new Germanwings service between Düsseldorf and Zurich will comprise 24 flights per week, making it one of the most high-volume routes from the North Rhine-Westphalian capital. The early morning flight will depart from Düsseldorf at 7.00 a.m. In addition to this, there will be a midday flight at 1.30 p.m., an afternoon flight at 5.05 p.m. and an evening service at 6.55 p.m.

Copyright Photo: Germanwings’ Airbus A319-132 D-AGWZ (msn 5978) taxies at London (Heathrow).

Germanwings (2nd) aircraft slide show:

Lufthansa Group outlines its plans for 2015, unveils the new Eurowings brand

Eurowings A320-200 and A330-200 (14)(Flt)(LRW)

Lufthansa Group (Frankfurt) has issued this report as a result of the meeting of the Deutsche Lufthansa AG Executive Board. The board gave approvals for the new Wings low-cost subsidiary and the launch of the new Eurowings.

Highlights include:

• Focus on 2015 as the year of ‘New Lufthansa Premium Quality’

• New European and intercontinental flight products under the “Eurowings” brand, and lease-in of up to seven Airbus A330-200s

• Letter of Intent with SunExpress for Eurowings long-haul routes

• Further structural development of Group airlines’ worldwide distribution

• Key financial indicator of “earnings after cost of capital” to replace “cash value added”

Here is the full report:

2015 should bring increasingly good news for customers and passengers of the Lufthansa Group, according to the plans of the Deutsche Lufthansa AG Executive Board. For the Group’s member airlines, fleet renewals and the completion of a number of major refurbishment projects should provide state-of-the-art aircraft cabins and five-star inflight travel comfort. The first quarter of 2015 will see Lufthansa German Airlines conclude the installation of its new First Class throughout its long-haul fleet; the second quarter will witness the completion of the new Business Class installation program; and the third quarter will see the new Premium Economy available on all of Lufthansa’s intercontinental aircraft. All the new long-haul aircraft of which Lufthansa will take delivery next year will have all the new cabins already installed. And the modernization of the long-haul fleet will be further pursued in 2015 with the arrival of two more Airbus A380s and four new Boeing 747-8s. Also slated for delivery next year are a further Boeing 777F for Lufthansa Cargo and ten short- and medium-haul aircraft of the Airbus A320 family.

“2015 will be the year of ‘Lufthansa Premium Quality’,” said Carsten Spohr, Chairman & CEO of the Deutsche Lufthansa AG Executive Board, on the occasion of the meeting of the company’s Supervisory Board today. “Whichever cabin they travel in, our inflight guests will be able to see and feel that Lufthansa is a premium-service airline which is one of the leaders in its field by any global benchmark. We will also be moving the entire Lufthansa Group further forward with our ‘7 to 1’ program,” Carsten Spohr continued. “And we presented the progress we have made in our various action areas here to our Supervisory Board today. As well as promoting innovation, it’s enhancing our quality and our efficiency that are particular focuses for us in all our concepts for new and further growth. And these enhancements will open up new opportunities for us in growth markets.”

‘New Growth Concepts’ action area

The Supervisory Board gave the formal go-ahead to the ‘Wings’ concept presented by the Executive Board at its meeting today, and approved the lease of up to seven Airbus A330-200 aircraft for the new low-cost operation’s intercontinental routes.

The Supervisory Board further approved the development of the ‘Eurowings’ concept, under which – within an umbrella framework – the Lufthansa Group’s Eurowings and Germanwings airlines, along with further flight operations in Europe, should acquire new customers by offering quality products at attractive prices in the form of low-cost short- and long-haul air travel services from the end of 2015 onwards.

The new products, which will be primarily aimed at the private travel sector, will help the airlines of the Lufthansa Group secure their strong positions in their home markets of Germany, Austria, Switzerland and Belgium in the point-to-point travel segment, too, in the longer term.

<p><a href=”http://vimeo.com/113519746″>The New Eurowings</a> from <a href=”http://vimeo.com/user19954503″>Bruce Drum</a> on <a href=”https://vimeo.com”>Vimeo</a&gt;.</p>

Video Above: The Lufthansa Group. The “New Eurowings”

“The ‘New Eurowings’ is our response to one of the major challenges confronting Europe’s airline industry,” Carsten Spohr explains. “For several years now we’ve been facing fierce competition from the rapidly-growing low-cost carriers in the point-to-point travel segment, not only in Germany but throughout Europe, too. And we are sure to see this competition extend more and more to the long-haul travel segment in the years ahead. Our ‘New Eurowings’ is our innovative response, which will enable us to fashion our own markets here.”

“Innovative concepts with substantially lower costs combined with the strengths, skills and expertise of the Lufthansa Group: that’s our recipe for success,” Spohr continues. “And our new ‘New Eurowings’ product will offer both outstanding value for money and the strongest quality, reliability and safety credentials.”

The ‘New Eurowings’ concept follows the successful transfer of Lufthansa’s non-hub routes to Lufthansa Group subsidiary Germanwings. The program of transferring all Lufthansa routes not serving its Frankfurt and Munich hubs should be completed in early January 2015.

Eurowings (2014) logo (large)

In an initial step, the two already-existing airlines Germanwings and Eurowings will continue to perform their flight operations with their current networks and crews, under the umbrella of the new concept. For the new European operations the present Eurowings fleet, which consists of 23 Bombardier CRJ900 jets, will be replaced with up to 23 Airbus A320s between February 2015 and March 2017. Ten new A320s have been ordered to this end, while up to 13 further A320s will be reassigned to Eurowings from existing orders held by the Lufthansa Group. This will give the ‘New Eurowings’ a standardized fleet of Airbus A320 aircraft by the end of 2017, along with the further cost benefits that will derive from these advanced aircraft’s fuel-efficient credentials. Further routes will also be added to the Eurowings network, operated from a new Eurowings base outside Germany, in the course of 2015.

In addition to its European network, the ‘New Eurowings’ will also begin to add long-haul services to its low-fare product range from the end of 2015 onwards, in collaboration with German-Turkish airline SunExpress. To this end, a Letter of Intent has been signed with SunExpress, a joint-venture company of Lufthansa and Turkish Airlines, under which the intercontinental services to be offered under the Eurowings brand will be flown under the air operator certificate (AOC) of SunExpress Deutschland and with SunExpress Deutschland cockpit and cabin crews. The first intercontinental destinations to be served will include points in Florida, Southern Africa and the Indian Ocean. The new flights will initially be operated by a fleet of three Airbus A330-200 aircraft each offering 310 seats. The Eurowings long-haul fleet should then be gradually expanded to up to seven A330-200s over the next few years.

As with the already-successful Germanwings concept, the new Eurowings long-haul products will offer customers a choice of ‘Best’, ‘Basic’ and ‘Smart’ fares. Home base for the new long-haul fleet will initially be Cologne/Bonn Airport; and Cologne will also be the home of the Wings carriers’ commercial management operations.

‘Efficient and Effective Organization’ action area: Lufthansa Group to reshape member airlines’ field sales structures

The Lufthansa Group will be realigning the field sales structures of its member airlines with effect from 1 March 2015, in response to the new demands of the world’s sales markets. In future, all the Group’s global field sales will be the responsibility of a single Group wide entity. The new arrangement should provide greater field sales harmony within the Lufthansa Group, in both product and distribution-technology terms.

‘Value-Based Management’ action area: “earnings after cost of capital” to replace “cash value added” as key financial indicator for corporate decisions

The Deutsche Lufthansa AG Executive Board also presented the Supervisory Board with a new value-based management concept at the latter’s meeting today which should be adopted at Deutsche Lufthansa AG in the course of the coming year. The new concept will see two new key financial indicators – earnings after cost of capital (EACC) and return on capital employed (ROCE) – replace the key financial indicator of cash value added (CVA) which is currently used in all decision-making processes and for the remuneration of executive staff from 2015 onwards.

The new key financial indicators are easier to calculate, which should help anchor value-based management even more firmly within the Lufthansa Group. The new figures show whether the capital employed is achieving sufficiently high results to increase the company’s value, and should thus ensure that all corporate decisions are as sustainably-minded as possible.

All images by the Lufthansa Group.

Lufthansa Group details its winter schedules changes with 18,900 flights a week

Lufthansa Group (Frankfurt) has announced the details of its combined schedules for the winter season:

The airlines in the Lufthansa Group – Austrian Airlines, Brussels Airlines, Germanwings, Lufthansa and Swiss International Air Lines – are again offering their customers a dense and high-frequency route network in the upcoming 2014/2015 winter flight timetable, with 18,900 flights a week. This winter, the Lufthansa Group airlines will be linking 260 destinations in 100 countries on four continents via its hubs in Frankfurt, Munich, Zurich, Vienna and Brussels, but also with many point-to-point connections. Around 20,500 weekly code-share flights with other partner airlines extend the carriers’ respective programmes and enable single-source bookings. The winter flight timetables for the individual Group airlines apply from Sunday, October 26, 2014 to Saturday, March 28, 2015. Thanks to the use of larger aircraft, the Group’s capacity in available seat-kilometers is increasing by 2.9 percent compared with the same period last year. At the same time, the number of flights in the period of the timetable is going down by 2.9 percent. On average, therefore, a Lufthansa Group aircraft is taking off somewhere around the world every 32 seconds. The individual route networks of the Group airlines are increasingly converging with one another. Almost all destinations are connected via a Lufthansa Group hub. End-to-end fares enable passengers to book multiple journeys with convenient and punctual connecting flights. 49 per cent of the nearly 105 million passengers a year now book a transfer connection via a Lufthansa hub. 19 European airports are even served by all five airlines in the Lufthansa Group.

Key news from the five Lufthansa Group airlines:

Lufthansa

This winter, Lufthansa is extending its route network to attractive new holiday destinations in warmer regions. After a break of over 15 years, Lufthansa is resuming flights to Las Palmas in the Canary Islands this winter. From October 26, the new connection will take off from Munich to Gran Canaria every Sunday, and every Saturday during school holidays too. Also new in the winter months are flights from Munich to Split (Croatia) and Valencia (Spain). As of October 2, Lufthansa also flies from Frankfurt to the Moroccan city of Marrakesh. This cultural city is situated at the foot of the Atlas Mountains in the Moroccan interior and can be reached in just under four hours with an Airbus A320 every Thursday and Sunday. A further addition to the flight plan from Munich is Miami in Florida, the US sunshine state, which will now have a daily nonstop connection. Delhi, the Indian capital, will also get a daily service from Frankfurt with the Airbus A380. The Frankfurt-Luanda connection to the capital of Angola will be strengthened by a third weekly flight. Starting on 15 December, Lufthansa and Deutsche Bahn will extend their joint AiRail product of fast ICE train connections to Frankfurt Airport from Karlsruhe and Kassel.

Swiss International Air Lines

In the winter flight timetable 2014/2015, Swiss is adapting its flight plans to winter demand. As well as seasonal reductions of some flights, Swiss is increasing its capacity to popular holiday destinations. The long-haul route between Zurich and Miami is to receive four extra Swiss flights a week, taking the total to fourteen weekly connections. Services to São Paolo, the biggest city in Brazil, will also be increased by three flights a week this winter, taking the total to ten weekly connections. The flight timetable will also include a daily connection to Los Angeles again. In Geneva, Swiss is continuing many destinations from its summer flight timetable throughout the winter, including Copenhagen, Rome, Lisbon and Pristina.

Austrian Airlines

In its 2014/2015 winter flight schedule, Austrian Airlines is again offering its passengers a wide range of up to 100 destinations in 56 countries around the world. Following the successful introduction of Newark (USA) last July, Austrian Airlines will increase its weekly capacity from five flights to six flights a week as of April 2015, and to one flight a day from June. From June 2015, Austrian will therefore be flying daily to all its North American destinations. As a result of high demand in transit traffic, Austrian Airlines is also increasing the frequency of its flights to and from Chişinău from seven a week to a maximum of ten a week in the future.

Brussels Airlines

Belgium’s largest airline is adding a new European destination to its winter flight timetable and improving many connections by adding additional flights: Riga, the capital of Latvia, will be served six times a week from Brussels as of October 26. Riga is one of the most important cultural and economic centres in the Baltic region and is hosting the EU presidency in the first half of 2015. Brussels Airlines is boosting its capacity with additional flights from Brussels to: Tel Aviv, Madrid, Marrakesh, Budapest, Geneva, Vilnius, Hanover and Bologna. Connections are also being improved to the African destinations of Douala, Yaoundé, Nairobi, Kigali, Bujumbura and Luanda.

Germanwings

In its winter flight timetable, Germanwings is offering a total of 84 destinations from Berlin-Tegel, Dortmund, Düsseldorf, Hamburg, Cologne/Bonn and Stuttgart. Additional capacity will still focus on Düsseldorf, where Germanwings is taking over more routes from Lufthansa. There are new high-frequency connections from the Rhineland metropolis to Berlin (57 flights a week), London-Heathrow (33 flights a week) and Zurich (24 flights a week). Also new from Düsseldorf are flights to Málaga (two flights a week), Naples (three flights a week), Nice (two flights a week), Moscow (seven flights a week) and Rome (five flights a week). The transfer of Lufthansa routes to Germanwings will be completed on January 8, 2015 with Düsseldorf – Zurich. Germanwings is also introducing a completely new route, Düsseldorf – Istanbul, with two weekly flights. Its programme in the German capital is also being extended with the takeover of two Lufthansa flights a week between Berlin-Tegel and Tel Aviv. With one flight a week, the German airline is also launching a new connection from Cologne/Bonn to the Cypriot port of Larnaca.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Lower cost Germanwings is taking most of the Dusseldorf routes from Lufthansa. Airbus A320-211 D-AIQH (msn 217) taxies at Antalya.

Lufthansa: AG Slide Show

Swiss: AG Slide Show

Austrian: AG Slide Show

Brussels: AG Slide Show

Germanwings: AG Slide Show

Lufthansa reports on the first year of the “new Germanwings”

Lufthansa (Frankfurt) has issued this information report on the first anniversary of the revamped Germanwings (2nd) (Cologne/Bonn):

For exactly one year now, the “new Germanwings” has enhanced the range of flights on offer for customers throughout Europe. On July 1, 2013, it launched an entirely new product and brand concept, and over the space of twelve months it has developed to become the third largest airline in Germany. Since July 2013, Germanwings has carried more than 16 million passengers. The number of routes on offer has also risen from 182 to 296 today. Germanwings now serves 130 destinations, most of which are in Europe.

Lufthansa amalgamated its domestic German and European flights that were not operated through its Frankfurt and Munich hubs in the “new Germanwings”. The handover of flight routes is now well advanced. In Cologne, Stuttgart and Hanover it has been completed, while in Hamburg and Berlin a few routes are still being transferred. Lufthansa began transferring routes to Germanwings in Düsseldorf in March 2014. Once the hand-over has been completed, Düsseldorf will be the largest Germanwings base.

Germanwings passengers rate the airline highly positively. In all the passenger surveys, they attest to the airline’s high-quality service, and the vast majority is extremely satisfied with the new offer. Customers thus reinforce Germanwings’ claim to be a low-cost-carrier offering flights at low prices and a high-quality service.

The expansion of Germanwings has also been successful from a commercial point of view: in comparison to last year, when the airline contributed €93 million to the Lufthansa Group’s earnings improvement year-on-year, the contribution is expected to increase again this year. For 2015, for the first time in many years, the Group expects to achieve a balanced result on its non-hub routes in Europe.

The airline, which is based at Cologne-Bonn Airport, has also significantly expanded its fleet. While just one year ago 38 jets bore the Germanwings livery, 71 aircraft can now be seen sporting the logo of the youngest airline in the Lufthansa Group. A further ten aircraft will join the fleet by the end of the year. The workforce has also increased from 1,600 to just over 2,000, the bulk of new staff recruitment being in flight operations. The number of flight personnel has thus risen from 1,174 to 1,614. Germanwings crews currently complete a total of 3,312 flights each week, compared with 1,891 a mere twelve months ago. Since its launch a year ago, Germanwings with its highly motivated team has already completed around 171,000 safe take-offs and landings. Carsten Spohr, Chairman of the Executive Board of Deutsche Lufthansa AG: “We have been on the offensive with the ‘new Germanwings’ in terms of point-to-point flights on European and German domestic routes that are not operated through our major hubs. We have combined our many years of experience in the low-cost segment and our high quality standards to develop a convincing concept that has been extremely well received by customers. With the ‘new Germanwings’, we have taken an important step and are now closer to achieving our goal of flying profitably beyond the major hubs within the short-haul traffic segment.”

Thomas Winkelmann, spokesman for the Germanwings Executive Board: “Germanwings is without a doubt one of the most creative airlines in Europe. Twelve months ago we entered new territory with Germanwings’ new product and brand promise. Since then, we have been combining the various requirements of different customer groups in one airline. Today we know that this bold decision was the right one: everyone feels at home on board of Germanwings. This is undoubtedly because we refuse to compromise on two points: safety and the friendly and expert way in which we deal with our customers.”

A unique feature of Germanwings is ‘à la carte flying’. When booking their tickets, passengers have a choice of three products in different price segments with different comfort add-ons: ‘BEST’ represents the high-end offer that primarily covers the needs of business passengers but that also appeals to certain leisure travelers. The ‘SMART’ fare product includes certain extra services, and ‘BASIC’ is a no-frills, low-cost fare.

Copyright Photo: Javier Rodriguez/AirlinersGallery.com. The Germanwings fleet has expanded from 38 to 71 Airbus aircraft in the past year. Formerly with Lufthansa, Airbus A320-211 D-AIQS (msn 401) now flies for lower-cost Germanwings.

Lufthansa: AG Slide Show

Germanwings (2nd): AG Slide Show

Germanwings to fly the Dusseldorf-London Stansted route

Germanwings (2nd) (Cologne/Bonn) will fly the Dusseldorf-London (Stansted) route starting on August 22. According to Airline Route, the route will initally be operated with Bombardier CRJ900s but will be upgraded to the pictured Airbus A319 starting on October 26.

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Airbus A319-132 D-AGWS (msn 4998) holds short of the runway at Zurich Kloten Airport (ZRH).

Germanwings: AG Slide Show

 

Lufthansa Group reports a lower first quarter operating loss of $341 million

Deutsche Lufthansa AG (Lufthansa Group) (Lufthansa) (Frankfurt) achieved a further increase in its operating result for the first quarter of 2014, thanks to continued progress with its Score results-enhancement program. In what is traditionally the weakest quarter of the year, the company posted an operating result of EUR -245 million ($341 million), a EUR 114 million ($158.7 million) or 31.8% improvement on the same period last year. Adjusted for non-recurring items, such as the cost for the accelerated installation of new Lufthansa Business Class seats, which accounted for some EUR 55 million in this period alone, the first-quarter operating result was improved by EUR 105 million to EUR -190 million ($264.5 million). The improved quarterly operating result can be largely attributed to an increase in profits at Lufthansa Technik and the positive impact of the revised depreciation policy for aircraft and spare engines which was adopted at the beginning of the year. In addition, the Lufthansa Group also improved its cost structures in the passenger segment.

Adjusted to eliminate fuel-price and currency factors, first-quarter unit costs for the passenger business segment were a 3.7% improvement on their prior-year level. The Group has set itself the goal of reducing such costs by 4% for 2014 as a whole by implementing various Score-related actions. Total revenue for the quarter amounted to EUR 6.5 billion, a 2.5% decline on the prior-year period. Lower traffic revenues were generated for the period, not least as a result of adverse currency movements. The revenue result was achieved with a 1.2% reduction in total flights operated, owing mainly to fleet modernizations and the use of larger aircraft. The net result for the period amounted to EUR -252 million, a substantial EUR 206 million or 45.0% improvement on the first quarter of 2013.

“This is a sound first-quarter performance and a slight improvement in our results for the period in a difficult market environment,” says Simone Menne, CFO and Member of the Executive Board at Deutsche Lufthansa AG. “We have improved our cost structures, and have taken various actions to enhance the quality of our revenues. And we will continue with our consistent efforts to further raise our efficiency.”

The Lufthansa Group has further confirmed its previous expectation of posting an operating profit of between EUR 1.3 and 1.5 billion for 2014 as a whole. The Group also remains confident of reporting a 2014 operating result adjusted for non-recurring items of between EUR 1.7 and 1.9 billion. The projections remain unchanged despite the Verdi strikes at German airports in March and the three-day strike at Lufthansa, Germanwings and Lufthansa Cargo by the Vereinigung Cockpit pilots’ union in April, which reduced Group earnings by over EUR 70 million.

“Our advance passenger bookings saw sizeable declines during the Vereinigung Cockpit pilots’ strike,” Menne continues. “And, with the competition we face on our European network and the strong pricing pressures on our North American routes, we haven’t yet been able to raise them again. So, despite the currently tense market environment, we are doing our utmost to recoup these earnings losses in our ongoing business.” Some assistance should be provided here by the fall in fuel prices: full-year estimates for this cost item are now lower following the first-quarter results than they were in March.

The Group’s Passenger Airlines business segment reported an operating result for the quarter of EUR -332 million, a EUR 31 million improvement on the same period last year. The progress here was partially due to the revised Group depreciation policy, whose lower costs added EUR 86 million to the quarterly result. At the same time, the decline in revenue per available seat-kilometre was offset by cost economies, which were reflected in a clear reduction in cost per available seat-kilometre. Among the Group’s member airlines, Lufthansa and Germanwings posted a quarterly operating result of EUR -286 million (a EUR 6 million year-on-year improvement), Swiss International Air Lines (Zurich) achieved an operating profit of EUR 6 million (up EUR 22 million) and Austrian Airlines (Vienna) posted an operating result of EUR -54 million (a EUR 2 million improvement on the prior-year period).

Lufthansa Technik made the most positive contribution to the Lufthansa Group’s first-quarter results, with an operating profit for the period of EUR 97 million, a EUR 16 million improvement on January-to-March 2013. The Group’s IT Services segment raised its first-quarter operating result by EUR 2 million to EUR 5 million. LSG SkyChefs reported a first-quarter operating result of EUR -4 million, a EUR 7 million year-on-year decline which was in part attributable to adverse currency movements. And with rigorous cost discipline in a still-tough market environment, Lufthansa Cargo achieved a solid operating profit of EUR 21 million, which compares to EUR 28 million for the prior-year period.

The first quarter of 2014 in figures

Total revenue for the first three months of 2014 amounted to EUR 6.5 billion, a 2.5% decline on the same period last year. Total operating income also declined 2.5%, to EUR 7.0 billion. At the same time, total first-quarter operating expenditure was reduced 6.0% to EUR 7.2 billion. Fuel costs for the quarter declined by EUR 157 million or 9.4% to EUR 1.5 billion. The figure includes a EUR 20 million loss from fuel price hedging activities. Fees and charges were 0.8% below their prior-year level, owing in particular to the lower flight volumes.

The Lufthansa Group achieved an operating result of EUR -245 million for the first quarter of 2014, a period that is traditionally the weakest of the year. The net result for the quarter amounted to EUR -252 million, a substantial EUR 206 million improvement on the first three months of 2013. First-quarter earnings per share rose from the EUR -1.00 of 2013 to EUR -0.55.

The Lufthansa Group increased its investments in modernizing and maintaining its aircraft fleet to EUR 755 million in the first-quarter period. All in all, the Group invested EUR 859 million, some EUR 141 million more than in the same period last year. Cash flow from operating activities totalled EUR 855 million, while free cash flow (operating cash flow less net capital expenditure) amounted to EUR 195 million. Net debt stood at EUR 1.6 billion, down EUR 61 million year-on-year. The balance sheet equity ratio as calculated in accordance with the new IAS 19 capitalization principles amounted to 17.9%, up 2.5 percentage points from the first quarter of 2013.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A340-642X D-AIHV (msn 897) of Lufthansa completes its final approach to the runway at Los Angeles International Airport (LAX).

Lufthansa: AG Slide Show

Germanwings: AG Slide Show

Bottom Copyright Photo: Paul Bannwarth/AirlinersGallery.com. The Lufthansa Group continues to shift more non-hub European flying to the lower-cost Germanwings. Airbus A319-132 D-AGWU (msn 5457) lands at EuroAirport.