Deutsche Lufthansa AG
- Airport Investment Details
- CAPA Analysis
- Fast Fact Report
- Corporate Address
- Deutsche Lufthansa AG
Lufthansa Aviation Center
60546 Frankfurt / Main
Ph: +49 69 696 28010
Swiss Global Air Lines
Deutsche Lufthansa AG is a global aviation group which operates in five primary business segments: Passenger air transport, logistics, MRO, catering and IT services. Originally established in Jan-1926, Deutsche Lufthansa AG maintains its Corporate headquarters in Cologne, Germany while several departments are located in the Lufthansa Aviation Center at Frankfurt Airport. The company is listed on the Frankfurt Stock Exchange (FWB: LHA).
Although Lufthansa is involved in a range of industry segments, its core business is the provision of passenger air transport services, with the collective passenger airline group accounting for over two-thirds of the company's total revenue. These services are delivered through its numerous airline subsidiaries.
Deutsche Lufthansa AG holds majority stakes in a number of airlines including:
- Deutsche Lufthansa AG (100%, since 1954)
- Lufthansa CityLine GmbH (100%, since Mar-1992)
- Lufthansa Cargo AG (100%, since 1994)
- Air Dolomiti S.p.A. (100%, since Jul-2003)
- Eurowings Luftverkehrs AG (100%, since 1-Apr-2004)
- Eurowings Europe GmbH (23-Jun-2016)
- Swiss International Air Lines (Swiss Global Air Lines) (100%, since 1-Jul-2007)
- Edelweiss Air AG (100%, since Nov-2008)
- Germanwings GmbH (100% since 1-Jan-2009)
- Austrian Airlines AG (100%, since Sep-2009)
- Tyrolean Airways Tiroler Luftfahrt GmbH (merged with Austrian on 01-Apr-2015)
Deutsche Lufthansa AG also holds minority stakes in a number of airlines including:
- SunExpress (50%, since Apr-1990)
- Brussels Airlines (45%, since 15-Sep-2008)
- Aerologic GmbH (50%, since 19-Jun-2009)
Lufthansa share price
7,727 total articles
419 total articles
Lufthansa's supervisory board has approved the exercise of its call option to buy the remaining 55% of SN Airholding, the parent company of Brussels Airlines. Lufthansa acquired 45% of the company in 2009 and negotiated the option to buy the balance of the shares for no more than EUR250 million. The deal is expected to close in early 2017, once the details of the purchase have been agreed with the other SN Airholding shareholders.
Lufthansa and Brussels Airlines have an extensive codeshare agreement and are partners in the Star Alliance. Their existing relationship is such that Brussels Airlines already feels like a member of the Lufthansa Group. The main draw for Lufthansa has always been its Belgian partner's extensive African network (it is the number two airline on Western Europe-Central/Western Africa).
However, it now seems that Lufthansa will, at least partly, integrate Brussels Airlines into its Eurowings low cost brand. Lufthansa is keen to accelerate Eurowings' expansion through partners (and is also to wet-lease up to 35 aircraft from airberlin). Brussels Airlines' fleet and single-class configuration on short/medium haul should fit with Eurowings, but its unit cost and network airline business model are not characteristic of an LCC.
Ryanair's expansion and Brexit are among factors which may have prompted reports about possible consolidation and other forms of co-operation involving Germany's leading airlines. These include - apparently false - speculation that easyJet has considered buying a stake in TUIFly (possibly to ensure that it has access to EU traffic rights post Brexit) and that TUIFly, a charter airline with growing seat-only sales, may be integrated with airberlin subsidiary NIKI and the TUIFly aircraft currently operating airberlin routes under wet lease.
An expanded TUIFly operation could, perhaps, better withstand fast-growing competition from Ryanair in Germany, although these stories have been denied. A more definitive development, announced by both parties, is that up to 40 of airberlin's narrow body fleet will be wet-leased to Lufthansa Group for its LCC Eurowings and Austrian Airlines. Airberlin will also put its leisure operations into a separate unit. These moves should partly alleviate airberlin's overcapacity problems, while accelerating the growth of Eurowings (further boosted by the possible integration of Brussels Airlines into the LCC).
Even if the other stories prove mere speculative, the frequency of such reports highlights the need for consolidation in Europe, whose centre is Germany. Moreover, they throw light on the rapid pace of change in business models in what has historically been a very conservative aviation market.
The 747 has been in the spotlight since the Aug-2016 passing of lead engineer Joe Sutter. The iconic aircraft's milestones and fade from service come into focus again with the impending retirement of Cathay Pacific's passenger 747 fleet. A Cathay Pacific 747-400 was the final commercial flight to depart Hong Kong's old airport at Kai Tak, while another Cathay 747 was the first commercial flight to land at the new airport at Chek Lap Kok – with that flight also the first to use a Polar Routing, one which has changed the Asia-North America market for all airlines.
After the 01-Oct-2016 return to Hong Kong of Cathay's final passenger 747 flight, CX543 from Tokyo Haneda, Cathay's last three passenger 747s will be decommissioned from normal service. The global fleet of passenger/combi 747-400s will then decrease to 204, according to CAPA's Fleet Database. The 747-400s in regular, non-charter service will number 175. Six airlines – British Airways, United, KLM, Lufthansa, Qantas and Thai Airways – operate 10 or more 747s, accounting for 65% of what is left of the regular in-service fleet. United will retire its 747 fleet by 2018, while British Airways and Qantas (which operates the slightly newer 747-400ER) look likely to be some of the last 747 (non-8i) operators, with service stretching into 2020.
SWISS finishes first phase of long haul fleet transition. New 777s driving growth, but yield suffers
In 2016 SWISS has rapidly added capacity to Southeast Asia and some of its other long haul markets as it has replaced A340-300s with 777-300ERs. The new 777s have 55% more seats than the A340s, pressuring yields as SWISS pursues more sixth freedom traffic in a highly competitive marketplace.
SWISS has taken delivery of six 777-300ERs in 2016, enabling it to increase capacity on four of its long haul routes – Bangkok, Hong Kong, Los Angeles and Singapore. It has three more 777-300ERs on order, which will be delivered in 2017 and drive further capacity increases in Singapore and San Francisco.
SWISS is now assessing whether it should acquire another six 777s to replace its last six A340s, with a decision expected by the end of 2016. Six additional 777s would result in another round of significant capacity increases, impacting Beijing, Johannesburg, Sao Paulo, Shanghai and Tokyo.
The last of Europe's leading listed airline groups reported 1H2016 results on 19-Sep-2016. This now allows analysis of the aggregate trends for the 15 largest European airline groups listed on the stock market that publicly report financial results for the first six months of the calendar year. These groups account for 53% of ASKs flown to/from/within Europe by all airlines and 71% of ASKs flown by European airlines (week of 19-Sep-2016, source: OAG).
Collectively, these 15 groups enjoyed an improvement in operating margin in 1H2016 versus 1H2015. This was achieved in spite of heavy downward pressure on unit revenue – thanks largely to lower fuel prices, which allowed them to cut unit costs more rapidly. However, there was a wider range of levels of profitability in the individual results compared with last year.
Moreover, in margin terms, there was a trend towards the strong getting stronger and the weak getting weaker. Further, there has been a number of profit warnings in the sector – particularly since the UK's Brexit referendum. This may mean that further improvements in the aggregate results of Europe's listed airline sector will be harder to achieve in 2017.
The A380 is once again under media scrutiny, despite there being no major movement on the type. Comments from Air France and Qantas about not taking further A380s have long been assumed, and it has been apparent that Malaysia Airlines does not even have the need for its A380s. Singapore Airlines not renewing the lease on its first A380 is hardly surprising, and offers no definitive conclusion about the A380 or second-hand market; early A380s had different production and are not as efficient as later models. The lack of movement on the A380neo continues to irk the model's largest customer by far, Emirates, and may not make for a productive relationship as Emirates weighs an A350 or 787 order.
For most, the A380 continues to fly. How and where it flies is changing. Flights to and from the Middle East are becoming more common as Gulf airlines, and mostly Emirates, take delivery of A380s. A further shift to the Middle East is inevitable. In Japan there has been a near exodus of A380s; airlines dropping the type as they moved from Narita to Haneda, which cannot accommodate the A380 during the day, and Singapore Airlines down-gauging. Intra-Asia flying is decreasing – notable given the growth of A380s based in the region. Services by the A380 to Australia are growing, perhaps as it becomes an easy market for airlines to redeploy capacity amid European security concerns and trans-Pacific overcapacity.