Casablanca Mohammed V Airport

Lufthansa Group presses forward with cost cuts as 2Q profits fall 24%

Europe’s largest airline group has decided to further revise full-year capacity growth downwards to 0.5% and rigorously pursue its SCORE restructuring programme to protect yield and combat the dire operating environment marked by economic uncertainties in Europe, a night-flight ban at its main hub in Frankfurt, increased air traffic taxes and above all high fuel prices. Lufthansa Group’s decision follows an unsatisfactory performance in 1H2012 in its passenger airline business segment, which recorded an operating loss of EUR179 million, widening the EUR100 million operating loss recorded in the year-ago period despite a 7.2% increase in revenue to EUR11.2 billion.

The Group’s airlines recorded diverging results and highlights the need to cut costs at its largest unit Lufthansa while simultaneously increasing synergies between the different airlines. Lufthansa German Airlines amassed a 1H2012 operating loss of EUR300 million (nearly double the EUR146 million operating deficit reported 1H2011) while SWISS and Austrian Airlines earned EUR48 million and EUR26 million, respectively. Austrian’s operating performance reflects the ruthless restructuring implemented by CEO Jaan Albrecht and the noteworthy turnaround is in contrast to the declining performance of Lufthansa Group’s long-standing star SWISS.

Royal Air Maroc fighting back LCC tide with new fleet, cost cuts and possible privatisation

Regional unrest in North Africa and the onslaught of LCC competition has taken its toll on Morocco’s national carrier, Royal Air Maroc (RAM). Job cuts and privatisation are on the table to address reported weekly losses of up to MAD20 million (EUR2 million). The carrier is also fighting back with an extensive fleet renewal programme that will see it become the first B787 operator in Africa in 2012, after last month becoming the world's first operator of ATR 72-600s.

Air France looks to regional points to counter LCC, TGV threat

Air France has announced plans to move away from its Paris-centric strategy and moved into regional French market in a bid to counter the growing threat of low-cost carriers in its home market, which remains one of Europe’s few remaining spaces for growth in the sector.