Lufthansa further increased its 2010 fuel cost estimate, adding that it now expects a fuel bill of EUR5.2 billion in 2010 (Dow Jones, 05-May-2010). The carrier had previously forecast EUR4.9 billion in fuel costs for 2010, an increase from EUR3.7 billion in 2009. The carrier added that the rise in jet fuel prices, combined with renewed industrial action by staff (which cost the carrier nearly EUR50 million) and repeated closures of airspace due to volcanic ash clouds, could jeopardise its forecast for improved operating earnings in 2010. However, the carrier has reiterated it expects 2010 operating earnings to be improved from the EUR130 million achieved in 2009. Newly integrated airlines, Austrian Airlines and bmi, accounted for a third of the carrier's 1Q2010 loss and are expected to also weigh on earnings for FY2010.
Lufthansa raises fuel cost estimate to EUR5.2bn
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SWISS made almost half Lufthansa Passenger Group operating profits 2009-2015, but trend slowing
From 2009 to 2015 SWISS accounted for 47% of the operating profits produced by all the airlines in the Lufthansa Passenger Airline Group, and 29% for the Lufthansa Group overall. It has also consistently been the Group's most profitable airline in margin terms. In 2015 it even managed to post a higher margin than Lufthansa's MRO business – traditionally a much more robust and profitable activity than most airlines.
Nevertheless, SWISS seems now to be struggling to maintain these achievements. Its passenger load factor, while still the highest in the group, is on the decline. Revenue is falling and SWISS suffered a drop in margin in 1Q2016. The seasonally weak 1Q may not say too much about prospects for the full year, but Lufthansa expects SWISS to report a slightly lower adjusted EBIT in 2016 relative to 2015.
With four new Boeing 777-300ER aircraft now in SWISS' long haul fleet and the first Bombardier C Series due to join its short haul fleet imminently, SWISS is not standing still.
Ryanair's Frankfurt move puts pressure on Lufthansa and supports its German growth ambitions
Ryanair and Fraport announced on 2-Nov-2016 that the Irish ultra-LCC will open its 85th base at Frankfurt Airport, Lufthansa's main hub. Ryanair will base two aircraft at the airport and launch four new leisure routes in Mar-2017. With a daily departure to each of Alicante, Faro, Malaga and Palma de Mallorca, it expects to attract 400,000 passengers pa.
Although Ryanair has been increasing its primary airport presence for some time, CEO Michael O'Leary had previously said that Frankfurt Airport was one of the few, alongside London Heathrow and Paris CDG, that Ryanair would not serve. Frankfurt was seen not only as too expensive, but also as too congested for Ryanair's short turnaround times. Details of Ryanair's agreement with Frankfurt Airport have not been disclosed, but it is likely that the airline has secured favourable terms in return for traffic growth targets.
Ryanair's move into Frankfurt is relatively small compared with its operations in Berlin Schoenefeld and Cologne/Bonn, but this development supports its growth ambitions in Germany. Ryanair's average revenue per passenger is half that of Lufthansa's network airlines. Its move increases the competitive pressure on Germany's national airline.