Friday, March 14, 2014

Lufthansa Group profit down 75% in 2013

The Lufthansa Group reported 2013 annual net income of €313 million ($434.2 million), down 75% from a €1.22 billion profit in the year-ago period.
Lufthansa Boeing 737-500
Lufthansa Boeing 737-500
By Rob Finlayson
Revenue fell 0.4% to €30 billion and operating profit was €697 million, down 16.9% year-over-year.
Lufthansa outgoing chairman and CEO Christoph Franz said the results were “driven by the earnings performance in the passenger business, where all airlines rose significantly. This performance trend is sustainable. It is based on a continuous improvement in the cost structure and on the billions invested in new products and services,” he said.
The previous year’s reported result was largely boosted by non-recurring income from transferring operations at Austrian Airlines, while the result for 2013 was depressed by restructuring and project costs for the installation of the new Lufthansa business-class seats.”
Fuel costs fell 4.5% €7.1 billion.
Adjusted operating margin declined 0.3 point to 3%. Franz said if Lufthansa can implement all the SCORE cost-cutting measures in 2014, it would be able to reach a 7% margin. 
Full-year traffic for the Lufthansa Group rose 2.3% and ASKs grew 1%.
The Lufthansa Group invested €2.5 billion in the reporting period, €156 million more than in the previous year. Of the total investment, €2.1 billion went to modernize and maintain its fleet.
In 2013, the Group ordered 167 new aircraft, worth €23 billion.
The passenger business overall performed well in 2013. It contributed €495 million, down 11% from €556 million in the previous year, including one-off effects) to the Group’s operating result.
Swiss International Air Lines accounted for a substantial share of €226 million, a year-over-year increase of €22 million.
Austrian Airlines reported a 2013 operating profit of €25.1 million, reversed from a €6 million loss in the previous year. Austrian credited its “rigorous structuring plan” for the return to profitability after six years.
Franz said Lufthansa has already become noticeably more dynamic and is creating value. “I am convinced that the Lufthansa Group and its staff will continue to successfully hold their own in an industry that will continue to change rapidly and consolidate further,” he said.

(atwonline.com)

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