Lufthansa Group results way down in 2009
Lufthansa suffered a revenue decline of 2.56 billion euros but managed to post an operating profit of 130 million euros for 2009. The Group thus earned about 1.2 billion euros less than during the previous year.
The past year’s figures were burdened by economy-related weaker demand and the disproportionate decline in average yields in the passenger business segment that accompanied it; both were consequences of the financial and economic crisis.
In view of these circumstances, the Executive Board will be proposing not to distribute a dividend to shareholders for the 2009 financial year at the Annual General Meeting.
“We are succeeding in the crisis because our business segments are broadly-poised and ideally-equipped, and because we have a strong balance sheet. In addition, we have taken targeted and swift evasive action to steer capacities and costs; without ever losing sight of the customer. Despite the highly challenging conditions, we cannot be satisfied with our operating profit, but it remains nevertheless a remarkable performance. It marks the reward for the consistent efforts invested in improving profitability and is the result of the hard work performed by all of the Lufthanseats,” commented Lufthansa Chairman and CEO Wolfgang Mayrhuber, speaking at the presentation of the full-year figures.
At minus eight million euros, the operating result for the Passenger Airline Group, which includes the financial results of Germanwings, SWISS, Austrian Airlines and bmi, was significantly below the level of the previous year. The aim to record an operating profit in this business segment was thus only narrowly missed.
In response to the negative trend in the core business segment, all of the Group’s airlines initiated measures to safeguard earnings and continued to pursue these during the past business year. The aim of Lufthansa Passenger Airlines’ “CLIMB 2011” programme to safeguard the earnings is the sustainable improvement of the result by one billion euros by the end of 2011. The implementation of the programme began in the third quarter of 2009; however, it could not yet prevent Lufthansa Passenger Airlines posting a loss of 107 million euros. SWISS posted an operating result of 93 million euros. From the date of full consolidation Austrian Airlines contributed an operating loss of 31 million euros to the overall result of the Passenger Airline Group and bmi entered a loss of 78 million euros. Germanwings posted an operating profit of 24 million euros.
The Logistics business segment was forced to deal with a major demand-related revenue slump in 2009 and posted a significant operating loss. The measures to safeguard earnings at Lufthansa Cargo, such as the reduction of freighter capacities and reduced working hours, as well as lower material costs and project budgets, continue to be applied. Lufthansa MRO did very well and recorded an increase in revenue despite highly challenging conditions. In addition, the business segment was able to compensate lower demand in individual areas and even achieve a year-on-year improvement in its operating result.
During the year 2009, the Lufthansa Group generated revenues totalling 22.3 billion euros, this was equivalent to 10.3 per cent less than the year before. There was a market-related drop in traffic revenue by 11.8 per cent to 17.6 billion euros. This was mainly due to the decline in passenger and freight figures, with the decline in average yields. Overall, the operating income of the Group decreased by 7.2 per cent to 25 billion euros during the reporting period.
Operating expenses decreased by 3.6 per cent to 24.8 billion euros during the course of the year. This was mainly due to the lower fuel costs which dropped by 1.7 billion euros to a total of 3.6 billion euros. The drop was equivalent to a year-on-year reduction of 32.2 per cent, which was both price and volume related. The fees and charges were 7.5 per cent above the previous year’s figure.