Lufthansa: why being the best of the Big Three is not good enough

Lufthansa is the most consistently profitable of the Big Three European legacy flag carrier groups and the only one to make a positive operating result in 2012. With 236 aircraft on order and a strong balance sheet that should facilitate funding these deliveries, it appears to be in a league of its own in Europe. However, group operating profit, which fell from EUR820 million in 2011 to EUR524 million in 2012, has been on a downward path since 2007. Results at the core Lufthansa Passenger Airline fell into loss, making it the group's weakest performer in 2012, a shocking reinforcement of the need to change.

Lufthansa is taking radical steps to restructure non-hub short-haul routes using its LCC subsidiary Germanwings after similarly radical restructuring at its Austrian Airlines subsidiary and is determined to push through with its SCORE cost savings programme. For 2013, it is targeting only a better operating result than last year, but its 2015 target of an operating result of EUR2.3 billion would represent its best ever three year improvement.