Tag Archives: Lufthansa Cargo

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

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.

Lufthansa Cargo aircraft slide show:

Lufthansa to operate around one half of its long-haul flights today due to the pilots’ strike

Lufthansa (Frankfurt) has issued this statement:

Lufthansa has published a special timetable for its services for Tuesday, September 8.

The action has been taken following a call by the Vereinigung Cockpit pilots’ union (VC) for its members at Lufthansa German Airlines and Lufthansa Cargo to take strike action.

A total of 1,500 passenger flights (including some 170 long-haul services) and seven cargo flights were scheduled to be operated during the planned strike period today.

With a relatively large number of cockpit personnel indicating their willingness to fly, the airline will be able to operate more than half of its intercontinental passenger services despite the VC’s strike call.

All in all, 84 long-haul services from or to Frankfurt, Munich or Düsseldorf will have to be cancelled, while 90 such flights can be operated.

The willingness of many pilots to work despite the strike call will also permit all seven scheduled cargo flights for Tuesday to be performed. Lufthansa Cargo will thus be able to maintain its full flight program.

All Lufthansa customers holding tickets for long-haul travel from or to Frankfurt, Munich or Düsseldorf are urged to check the latest status of their flight on LH.com well in advance of their scheduled departure.

Lufthansa aircraft slide show:

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:

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.”

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.

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.

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.

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.

Lufthansa aircraft slide show:

Lufthansa Cargo to bring home the remains of the victims of Germanwings flight 4U9525

Lufthansa Group (Frankfurt) tomorrow (June 9) will operate a special Lufthansa Cargo (Frankfurt) McDonnell Douglas MD-11F flight from Marseille to Dusseldorf which will bring home the remains of the victims of Germanwings (Cologne/Bonn) ill-fate flight 4U9525 which crashed in the French Alps. Transfer of the remains to the victim’s families will occur on June 10. Lufthansa Cargo will operate more flights in the coming weeks until the end of June. The group issued this statement:

Lufthansa is working with all its available resources to ensure the repatriation and transfer of victims of the Germanwings flight 4U9525 to the relatives in the originally planned schedule. To start off the repatriation flights, Lufthansa will arrange at short notice a special flight with a MD-11 of Lufthansa Cargo from Marseille to Dusseldorf. The plane will take off from Marseille on June 9 at 20:50 and is expected at Dusseldorf at 22:30. There will be 30 coffins of the victims of flight 4U9525 on board.

The repatriation of the victims was initially scheduled for next week. At short notice, however, a delay had resulted due to regulatory requirements. The Federal Government Commissioner for the victims’ relatives had then turned immediately to the authorities and received assurances that preparations for repatriation could be made immediately.

After this first special flight to Dusseldorf, the other victims will be gradually transferred to their home countries in the coming weeks. The French authorities are working hard in order to create the formal conditions for the transfer of the victims as soon as possible. Lufthansa is in close contact with the relatives to ensure that the transfer of the victims is carried out according to the relatives’ wishes.

Copyright Photo: Pascal Simon/AirlinersGallery.com. McDonnell Douglas MD-11F D-ALCM (msn 48805) departs from the Frankfurt cargo hub.

Lufthansa Cargo aircraft slide show:

Lufthansa Group reports a first quarter profit of €425 million ($474 million)

The Lufthansa Group (Frankfurt) reported a net profit of €425 million ($474 million) for the first quarter. Here is the full report:

The Lufthansa Group has reported a positive course of business for the first quarter of 2015. At total revenue of nearly 8 per cent higher, the EBIT and adjusted EBIT both rose by EUR 73m. Both key performance indicators were thus 30 per cent higher than in the previous year. The Group closed the first quarter with an adjusted EBIT of EUR -167 m (previous year: EUR -240 m).

Simone Menne, Chief Officer Finance and Aviation Services of Deutsche Lufthansa AG, says: “All operating business segments were able to increase their results in the first quarter. Above all, Swiss International Air Lines (Zurich) and Lufthansa Cargo (Frankfurt) have done better than in the previous year. But Lufthansa German Airlines has also shown a positive development, although it was worse hit by strikes and other one-off effects than in the previous year.”

The Group result rose significantly more strongly than the adjusted EBIT in the reporting period. With a plus of EUR 677 m in comparison with the same quarter in the previous year, the Lufthansa Group achieved a consolidated result of EUR 425 m. An extraordinary effect from the premature exchange of JetBlue swaps made a significant contribution to this development. This transaction alone improved the financial result without an effect on equity by EUR 503m.

The result was once again overshadowed by the consequences of the strike called by the trade union Cockpit among the pilots of Lufthansa German Airlines, Lufthansa Cargo and Germanwings on a total of six days between January and March 2015. Flight cancellations caused by strikes led to a burden on the result of EUR 42m. Due to weaker advance bookings in the following quarters as a consequence of the strike, Lufthansa expects a further burden on the result of EUR 58m.

Cash flows, which are important in view of high total investments, developed positively in the reporting period. Cash flow from operating activities rose to EUR 1,394m (previous year: EUR 855m), the free cash flow improved to EUR 532m (previous year: EUR 195m).

The actuarial interest rate for valuing pension obligations declined further in the first three months of the year, in Germany from 2.6 per cent to 1.7 per cent now. Thus the arithmetic pension burden rose by EUR 3.4bn. This was contrasted with a growth in pension assets of around EUR 500m. The equity ratio fell by 5.7 percentage points to 7.5 per cent now.

“This development shows once again how volatile the key figure ‘equity ratio’ has become since the introduction of the new IFRS accounting standards. We are not alone in this situation. However, other groups have already made the necessary structural change from a cover oriented to a contributions oriented pension commitment. Here, more urgently than ever, we need sustainably financeable solutions in place of obsolete structures. We can only achieve this together with our collective bargaining partners,” says Simone Menne.

Operating costs and income showed strong fluctuations in comparison with the same quarter in the previous year. What was decisive here was the significantly lower oil price, the continuing weakness of the euro and low interest rates. Fuel costs were EUR 209m lower than in the same quarter in the previous year, while expenses on fees went up by nearly 7 per cent, despite the lower number of flights and passengers. The weak euro and the rise in pension expenses also led to an increase in staff costs of nearly 7 per cent.

Simone Menne summarised the interim report for the first three months of the year: “We see positive developments in the result and in cash flow. This shows we are on the right course. At the same time, we continue to see great pressure to act. The enormous pension burdens are putting considerable pressure on our equity. And we cannot accept the continuing increase in fees or the development of our unit costs. Great efforts remain to be made here in order to strengthen the international competitiveness of all the business segments of the Lufthansa Group.”

Copyright Photo: Rolf Wallner/AirlinersGallery.com. Swiss and Lufthansa Cargo did better than in the same quarter than the previous year. The aging Swiss Airbus A340-300s will be replaced with the new Boeing 777-300 ERs on order. A340-313 HB-JMK (msn 169) taxies at the Zurich hub.

Swiss aircraft slide show:

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

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>.</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.

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 Cargo to operate all flights despite a strike by the pilots

Lufhansa Group (Frankfurt) has issued this statement concerning a strike against subsidiary Lufthansa Cargo (Frankfurt):

Good news for customers of Lufthansa Cargo: the airline plans to operate all of its flights despite the walkout announced by the pilots’ union, Vereinigung Cockpit. The strike was set to ground all cargo flights scheduled to depart from Frankfurt on Wednesday (October 8) and Thursday (October 9).

Two flights will be departing earlier than scheduled, allowing them to bypass the strike period. As Lufthansa Cargo usually flies about half of its freight in the bellies of Lufthansa and Austrian Airlines passenger aircraft, the effects for customers will be kept at an absolute minimum.

Lufthansa has shown willingness to compromise in its discussions with Vereinigung Cockpit and offered new negotiations on the disputed issues. The airline therefore has little understanding for this renewed call to a strike and also considers it entirely out of proportion – especially as the minimum age for early retirement at Lufthansa Cargo is already 60 years.

Lufthansa Cargo:

AeroLogic adds a new route to Hong Kong

AeroLogic (Leipzig/Halle) on October 26 will add a new weekly cargo route from Frankfurt to Hong Kong via Ashgabat. The return flight will operate nonstop per Airline Route.

The company was established as a joint venture by Deutsche Lufthansa AG and Deutsche Post Beteiligungen Holding AG. The respective companies of the shareholders entrusted Lufthansa Cargo and DHL Express with the operational responsibility.

AeroLogic has its own Air Operator Certificate (AOC), its own traffic rights, and is responsible for all airline operations including aircraft, pilots and network.

The route network includes more than 20 destinations in Europe, in the Middle East, in Asia and North America. During the week, AeroLogic mainly flies to Asia within the express network of DHL Express, and on the weekend to the USA within the network of Lufthansa Cargo respectively.

AeroLogic:

Video:

ANA and Lufthansa Cargo obtain antitrust immunity for their Japan-Europe joint cargo venture

ANA-All Nippon Airways (Tokyo) and Lufthansa Cargo AG (Frankfurt) will launch a strategic air cargo joint venture on routes between Japan and Europe and vice versa. This is the first worldwide cargo joint venture of its kind. ANA has received antitrust immunity, i. e. approval for the joint venture from the Japanese Ministry of Land Infrastructure and Transport after filing for it in the spring of 2014. In addition, the joint venture has been positively assessed by external counsel for compliance with relevant EU antitrust regulations.

Now ANA and Lufthansa Cargo can jointly manage activities covered by the joint venture including network planning, pricing, sales and handling on all routes between Japan and Europe and vice versa. Based on a joint contract which shall be signed in the next weeks, the two carriers aim to introduce the joint approach on shipments originating from Japan to Europe in winter 2014/2015 and for shipments from Europe to Japan mid-2015.

The joint venture will benefit customers by generating a greater selection of routings and a wider range of service options. Customers will especially profit from a larger and faster network with more direct flights, more destinations and more frequencies. By their moving under one roof at major stations, such as the airports Tokyo Narita and Nagoya in Japan and Dusseldorf and Frankfurt in Germany, customers will enjoy the services of both airlines at a single location.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. ANA Cargo’s Boeing 767-381F ER JA602F (msn 33509) arrives at bthe Tokyo (Narita) base.

ANA:

Lufthansa Cargo:

Bottom Copyright Photo: Rob Skinkis/AirlinersGallery.com. Boeing 777-FBT D-ALFC (msn 41676) of Lufthansa Cargo lands at Manchester.

Lufthansa Cargo shows you where their aircraft are in real time

Lufthansa Cargo (formerly German Cargo) (Frankfurt) on its website has introduced a new tracking service using FlightRadar 24 that shows you in real time where each of their aircraft and flights are located.

CLICK HERE

Copyright Photo: Bernhard Ross/AirlinersGallery.com. McDonnell Douglas MD-11F D-ALCR (msn 48581) is pictured at the Frankfurt cargo hub.

Lufthansa Cargo: