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Lufthansa Posts Profit for 2010

March 21, 2011 By: Jena Tesse Fox

The Lufthansa Group has ended the 2010 business year with a strong balance sheet. The Group earned an operating profit of $1.2 billion for 2010, which is equivalent to a more than fivefold increase of the previous year’s figure of $184 million. The Group’s net profit rose to $1.5 billion, which marked an increase of $1.7 billion.

The Group compensated the negative one-off effects of such problems as the tough winter in January and December, the pilots’ strike and the airspace lockdown which lasted several days as a result of the volcano eruption on Iceland. 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.

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. 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—contributed to the improvement of the result.

Further investments included the addition of four A380 with the new First Class product, the introduction of the new European cabin on continental routes and the re-introduction of the on-board Internet system “Flynet." SWISS tripled the previous year’s figure to record an operating profit of $422 million. The overall result of the Passenger Airline Group also included operating losses of $93.5 million from Austrian Airlines and $205 million 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 $55 million.

Chairman and CEO of Deutsche Lufthansa AG Christoph Franz described the year 2010 as an eventful and challenging, yet ultimately successful one, and, speaking about the full-year figures, said, “This result…shows that we have learned from the crises of the past. We maintained our financial and operational flexibility, as well as our usual cost discipline, and convincingly mastered the past year – not least thanks to a strong team performance by all of our staff and management on the ground and in the air.”

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About the Author

Jena Tesse Fox
Jena Tesse Fox covers Europe, Africa, Australia/South Pacific and business travel for the Questex Travel Group's publications. The daughter of history teachers, she can spend...

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By Jena Tesse Fox | March 21, 2011
The Lufthansa Group saw its net profit rise by more than $1 billion, significant increase over the previous year.
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