Lufthansa posts 876 million euro operating profit for 2010
The Lufthansa group earned an operating profit of 876 million euros for 2010, which was equivalent to a more than fivefold increase of the previous year’s figure of 130 million euros.
The Group’s net profit rose to 1.1 billion euros, which marked an increase of 1.2 billion euros. The figure includes a positive one-off tax effect of around 400 million euros from the financial restructuring of the Catering business segment. The Group therefore compensated the negative one-off effects on the result, such as the hard winter in January and December, the pilots’ strike and the airspace lockdown for several days as a result of the volcano eruption on Iceland, better than could have been expected at the mid-year point.
This was mainly due to a rise in demand and sales in international passenger traffic and freight traffic, as well as the successful implementation of cost reduction measures in all of the Group’s business segments and the realization of synergy potentials within the Passenger Airline group.
All of the business segments contributed to the Group’s good result by posting operating profits. Lufthansa plans to let its shareholders share in the Group’s success with a dividend payment of 60 cent per share.
During the past business year, the Lufthansa Group’s largest business segment, the Passenger Airline Group, benefited particularly from the recovery in demand in long-haul traffic and the realization of synergy potentials within the airline group. The operating profit of 436 million euros included a substantial contribution from Lufthansa Passenger Airlines, which recorded an operating profit of 382 million euros. During the previous year, Lufthansa Passenger Airlines had posted an operating loss of 107 million euros.
Cost reduction measures, for example the phasing out of the 50-seater fleet, which were implemented within the framework of the Climb 2011 programme to safeguard earnings, contributed to the improvement of the result. Lufthansa Passenger Airlines will continue with the Climb 2011 programme until the end of the year as planned.
The overall result of the Passenger Airline Group also included operating losses of 66 million euros from Austrian Airlines and 145 million euros from British Midland. Both airlines continue to consistently implement the introduced restructuring measures. Germanwings continued on its course of growth; however, the one-time special effects of the past year resulted in a negative operating result of 39 million euros.
Lufthansa Cargo increased its traffic revenue and benefited from strict cost management, higher prices and good competitive positioning, to record a higher than average success as a result of the economic recovery. The company posted a record result in 2010, closing the year with an operating profit of 310 million euros.
As expected, the MRO business segment benefited from the economic recovery later than the Group’s other business segments. However, Lufthansa Technik was able to earn an annual operating profit of 268 million euros despite the decline in revenue it faced at the beginning of the year.
The IT Services business segment also recorded a positive operating result at 10 million euros; however, Lufthansa Systems was only partially able to compensate the decline in revenue in this business segment. The company therefore plans to achieve a sustainable improvement of its revenue and result with the implementation of its “LSY Now!” programme. LSG Skychefs increased its operating profit in the Catering business segment to 76 million euros.
During the year 2010, the Lufthansa Group generated revenues totalling 27.3 billion euros, a year-on-year increase of 22.6 per cent. The traffic revenue rose by 26.5 per cent to 22.3 billion euros. During the reporting period, the Group’s operating income increased by altogether 20.4 per cent to 30.1 billion euros. The adjusted figures without the consolidation effects increased by 14.4 per cent (revenue), 16.2 per cent (traffic revenue) and 12.6 per cent (operating income).