Lufthansa lifts first-half profits

Commenting on the first-half results, Lufthansa Chairman and CEO Wolfgang Mayrhuber said: "Our strategy is working and we are doing our homework. That is paying off. Our results are fully in line with planning." The second quarter, especially, was highly gratifying for the Group. Operating profits in that quarter were up by 93 million euros to 372 million euros. The Lufthansa Chairman remains optimistic for the full year and is now expecting the Group to improve on the year-earlier results. Last year, the Lufthansa Group returned a profit of 577 million euros.

"We can see progress and potential in all our business segments," Mayrhuber emphasised. It is, however, especially important that good results were achieved in our core passenger business. "Raising profits by close to 40 million euros despite the high oil prices demonstrates Lufthansa's strength," said the Chairman. "Our customers are flocking to Lufthansa. They appreciate our quality, the professionalism of our staff and the customised products which Lufthansa offers them." With that approach, the Group has improved yields in all traffic areas. "Our market driven capacity expansion was exactly right."

Wolfgang Mayrhuber emphasised that Lufthansa has succeeded in saving while, simultaneously, continuing to develop high-level quality and service. "We are saving in the right place, namely at our Company and with partners. We are not saving at the customers we are investing for them. Customer satisfaction remains at a high level. Our premium products in First and Business Class, the Lufthansa Private Jet Service and the highly attractive "Better Fly" economy fares are meeting with an enthusiastic response."

All the business segments contributed to the first-half success with operating profits. Wolfgang Mayrhuber is highly satisfied with the integration of SWISS in the Lufthansa Group. Swiss has returned to profit and will continue on its successful course, he observed.

The Lufthansa Chairman emphasised that the Group will continue unchanged its action plan which has to date realised savings of one billion euros. "Our objective is to boost earnings by 1.2 billion euros by the end of this year and we will achieve that target." Saving is today an ongoing challenge and the pressure to reduce costs remains unchanged in face of high oil prices and the unrelenting, strong competition. "We have no intention of sitting back but will continue to seek ways of raising earnings and lowering costs. Only in that way can we create perspectives for the staff and shareholders. Only in that way can we invest for our customers."

First-half figures 2006

In the first six months of 2006, the Lufthansa Group generated revenues totalling 9.6 billion euros, a year-on-year increase of 14.2 per cent. Like all other figures, the revenue total is only partly comparable with the first half in the previous year owing to the first-time consolidation of the Eurowings group. However, higher passenger numbers and rising yields also increased the traffic revenues returned by the Group's airlines by 13.9 per cent to 7.4 billion euros.

Operating expenses rose by 12.5 per cent to 9.9 billion euros but the increase remained below the growth in revenues. Aside from the expanded group of consolidated companies, the increase was largely attributable to the high oil price. In the first six months of the year, the Group's airlines spent 1.6 billion euros on fuel. That was 516 million euros or 46.5 per cent more than at the halfway stage in the previous year.

Lufthansa posted a first-half operating profit of 297 million euros, an increase of 44 million euros on the year-earlier level. An improvement of 100 million euros in the financial result lifted the Group's net profit to 85 million euros. The financial result reflects principally a good result from subsidiaries: SWISS made a positive contribution to Group profits. Thomas Cook AG improved its year-on-year results. The Group broke even on its first-half net result in 2005.

The Group's capital expenditure in the first six months totalled 876 million euros, of which 267 million euros was invested in aircraft. Operating cash flow totalled 697 million euros. Net indebtedness totalled 101 million euros at 30 June 2006.