Austrian Airlines

Lufthansa reports positive 2011 result despite challenging year

The Lufthansa Group has reported a positive overall result for 2011 with an operating profit of EUR820 million. But this represents a EUR200 million drop in operating profits compared to 2010 as the airline dealt with weaker economic conditions within the EU, rising fuel prices and increasing regulatory pressures through environmental taxation. 2012 will see the Group search for synergies and cost savings under its 'SCORE' programme, and increased attention will be paid to Austrian Airlines as it attempts to return to profitability through restructuring.

Lufthansa Group’s revenue in 2011 rose 8.6% to EUR28.7 billion. The Group incurred a net loss of EUR13 million but this was driven by a EUR285 million loss “from discontinued operations”. This resulted from the Group’s sale of bmi to the International Consolidated Airlines Group (IAG) in late Dec-2011.

airBaltic unveils restructure plan as it seeks to return to the black by 2014

With its latest business plan, airBaltic has joined a number of other European carriers seeking to turn around its operations. As with Air France, Austrian Airlines and Air Malta, airBaltic is attempting to return to profitability in the face of rising competition and fuel prices. The carrier’s restructuring plan is aimed at strengthening its operations with a modernised and simplified fleet, while reducing expenses and its workforce.

airBaltic’s plan, titled “ReShape”, was unveiled earlier this month but had been expected following developments in late 2011 - when the Latvian Government stepped in to acquire Baltic Aviation Services’ (BAS) 47.2% stake in the carrier. This brought the Government’s total ownership of airBaltic to 99.8%.

Changes - and perhaps conflict - ahead for Austrian Airlines as it seeks a return to profitability

Austrian Airlines is facing a testing period after posting operating losses of well over EUR100 million (USD129 million) over the past two years. The carrier, under the leadership of new CEO Jaan Albrecht, is aiming to return to profitability in 2012 but significant changes will have to occur for this to become a reality. Austrian has stated that it suffers from multiple historical structural disadvantages, forcing it to implement a restructuring programme to stabilise the carrier and ensure its future “once and for all”. But rumblings from staff suggest this might not be plain sailing.

Cost reductions reaching EUR200 million (USD255 million) in 2012 are going to be key factors in the airline’s mission to return to the black. This year will also see continued uncertainty in the airline’s focus markets, with the crisis in the Eurozone and increased expenses resulting from the European Union’s Emissions Trading Scheme likely to affect plans at the carrier.

Star Alliance unveils common economy class seat

Star Alliance has completed its development of a common long-haul economy class seat its member airlines can avail themselves of. The B/E Aerospace seat is approximately 30% lighter than existing seats, and 15,000 of them will be installed by the end of 2012 on long-haul aircraft from Air China, Austrian and Lufthansa, the three initial customer airlines. Installation will begin in the northern hemisphere's 2012 summer.

Lufthansa earnings fall 27% as outlook deteriorates further

Germany’s Lufthansa Group, Europe’s largest airline group by revenue, reported a 27% drop in third quarter (three months to 30-Sep-2011) operating profit as “the macroeconomic environment darkened significantly” in the period. The group warned the economic gloom is showing no signs of abating and due to an ugly forward bookings profile, Lufthansa is again slashing future capacity plans.

The airline breathed a sigh of relief as the third quarter result pushes the airline back firmly into the black in the YTD period. Although the result “does not have us jumping for joy,” CEO Christoph Franz said, Lufthansa is profitable while many “competitors are struggling to make figures that are not in the red”.