Lufthansa soars to US$1.4bn profit

Lufthansa achieved a strong financial performance in 2013, as a strong passenger business and continued cost-cutting efforts boosted the group.

The German airline group generated an operating profit of EUR1.04 billion (US$1.4bn) for the 12-month period, up 62% compared to 2012. The result was achieved despite a 0.4% dip in revenues, to EUR30.03bn. But the company was boosted by a 4.5% decline in fuel costs, which were reduced by EUR334m to EUR7.1bn, while other fees and charges fell due to a reduced number of flights being operated.

“We have strengthened the earnings power of the Lufthansa Group again last year,” said Christoph Franz, chairman & CEO of Lufthansa. “This is 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.”

This investment in new products saw Lufthansa order 167 new aircraft, worth EUR23bn, in 2013. It also recently launched a new premium economy class product, which will be rolled out across Lufthansa’s long-haul fleet.

By unit, Lufthansa and Germanwings generated an operating profit of EUR265m in 2013, while SWISS accounted for EUR226m and Austrian Airlines generated EUR25m.

And the airline said its cost-cutting strategy, ‘Score’, is also helping the streamline the business and improve results.

“Score is on track. We have achieved our profit and restructuring targets for 2013. And we have created the conditions that will enable us to keep increasing our profits in the years ahead. We are working on further measures to improve earnings, which will enable us to cope with greater headwinds, too,” said Simone Menne, Lufthansa’s chief financial officer.

Lufthansa is now planning to increase its profits to between EUR1.7bn and EUR1.9bn for 2014.