Lufthansa Group makes profit despite Bmi and Austrian losses

17 Mar 2011 by BusinessTraveller

The Lufthansa Group has announced an overall operating profit of €876 million for 2010, including €382 million from the Lufthansa Passenger Airlines business. But subsidiary Bmi posted a loss of €145 million.

The overall figure is a five-fold increase on 2009’s operating profit figure of €130 million. The group said that the positive result was “mainly due to a rise in demand and sales in international passenger traffic and freight traffic, as well as the successful implementation of cost reduction measures in all of the Group’s business segments and the realization of synergy potentials within the Passenger Airline group”.

But while all business segments within the Lufthansa Group posted operating profits, some individual airlines did not do so well. Austrian Airlines posted a loss of €66 million, while Germanwings lost €39 million, and Bmi posted a loss of €145 million. Swiss, however, posted an operating profit of €298 million.

Commenting on these individual figures, the group said that “Both airlines [Bmi and Austrian] continue to consistently implement the introduced restructuring measures, while Germanwings has “continued on its path of growth”.

The group pointed to the launch of Lufthansa’s A380 aircraft, the introduction of its new Europa cabin, and the reintroduction of inflight internet as “just a few of the past year’s investments in Lufthansa’s on-board and ground products”.

However CEO Christoph Franz warned that 2011 “will not be a walk in the park”.

“The headwinds of competition are becoming rougher on the European routes and long-haul routes to Asia and the Americas,” he said. “The German air traffic tax hits the German and European airlines, as well as their passengers, where it hurts. The fuel prices are at record levels. And we are not immune to the consequences of political unrest, terrorist attacks and natural disasters.”

But he said that the company still “expects its revenue and result to also develop positively in 2012”, providing business is not affected by “a disproportionately high increase in fuel prices or other unforeseeable events”.

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Report by Mark Caswell

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