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Company Watch - Lufthansa.

New York (AirGuideBusiness - Company Watch) May 13, 2012

Lufthansa tops ATW inaugural Eco-Aviation Awards list. Lufthansa Group has been named the Gold Eco-Airline winner in Air Transport WorldOs inaugural 2012 Eco-Aviation Awards. Lufthansa topped a group of Eco-Aviation Award winners that include FedEx Express, Southwest Airlines, Dallas/Fort Worth International Airport (DFW), the Sustainable Aviation Fuels Northwest (SAFN) project and Pratt & Whitney. LufthansaOs breadth and depth of environmental efforts across the entire company made it stand out as this yearOs Eco-Airline Gold winner. The airlineOs dedication to fuel-efficiency, which is achieved through an ongoing investment in fleet modernization, and the development of a more effective flight-route planning solution; humanitarian relief that provides aid to communities struck by natural disasters and supports protection of endangered species; and vital umbrella support from senior-level management via LufthansaOs cross-departmental sustainability board, caught the editorsO attention. Also noteworthy was LufthansaOs long-term research program conducted through the latter half of 2011 in which it assigned an Airbus A321 to fly routine, eight-times daily scheduled flights between Hamburg and Frankfurt using biofuel in one of its two engines. The burnFAIR project demonstrated that fuel burn was slightly less than with conventional jet fuel, but even more importantly established the principle of biofuelOs technological suitability for routine airline operations. FedEx Express was named ATWOs Silver Eco-Airline for its approach to minimizing its impact on the environment. The companyOs EarthSmart program aims to find or create new ways to improve its own environmental performance and point the way for other companies in the aviation and logistics. The companyOs 20 by 20 program has the goal of reducing aircraft emission by 20% by 2020. To date, FedEx has achieved a 13.8% reduction. Southwest Airlines was named Eco-Pioneer for its focus on efficiency that made it an eco-pioneer long before environmentally sound business practices were understood or recognized. SouthwestOs newest product, Evolve, is an all-new eco-friendly, cost-efficient cabin interior that emphasizes comfort and personal space. Southwest launched the Green Plane to test the latest sustainable products onboard an aircraft and Evolve interior incorporates many elements of the Green Plane test. Eco-Airport winner DFW Airport used 87 million kilowatt-hours of electricity from renewable wind energy in 2011, resulting in a reduction of over 52,000 metric tons of GHGs. DFW also retrofitted its central utility plant to reduce direct emissions of GHGs by over 50% in the past decade. The SAFN joint program brings together Alaska Airlines, Boeing, the Ports of Portland and Seattle, Spokane International Airport and the Washington State University in a unique and pioneering effort, the first such regional program in the US, to identify safe, sustainable, low-carbon resources to power the next generation of flight. It won the Eco-Partnership Award. Pratt & WhitneyOs EcoPower jet engine washing system, winner of the Eco-Technology Award, is certified under the Verified Carbon Standard, the worldOs most renowned voluntary CO2 offset agency. Pratt has the ability to certify the CO2 savings directly related to the fuel burn reduction, which is a result of regular EcoPower jet engine washing. The first ever aviation-related CO2 certified offsets were awarded in a ceremony on Feb. 13 to Hawaiian Airlines. ATW editors will present the awards on June 21 at a dinner ceremony in Washington, DC following the ATW Fifth Annual Eco-Aviation Conference. May 8, 2012

Lufthansa confirms new UK-Berlin routes despite airport delay. Lufthansa confirms that its new UK routes to Berlin from Birmingham and Manchester will go ahead as planned on June 3.E But these once daily services will now operate to and from the cityOs existing Tegel airport and not theEnew Brandenburg facility whose opening has been postponed. Lufthansa also confirms that its current three times a day service out of Heathrow (which currently operates into Tegel) will remain unchanged on and after June 3. As yet there is still no timescale as to when Brandenburg will open. However, aEReuters report now suggests that the opening might be delayed until 2013. An official announcement is expected later today. Lufthansa had planned a significant increase in operations at Berlin to coincide with the opening of the new airport.E The carrier now intends to operate these out of Tegel instead. Its Berlin-based fleet is set to rise from 9 to 15 aircraft which will enable Lufthansa to boost the number of cities served from GermanyOs capital city from eight to 38. Almost all of these are in Europe and it means that Lufthansa will be offering 40 per cent more seats in the Berlin market from June 3. The two biggest users of Berlin Tegel,E home carrier Air Berlin and Lufthansa, will claim damages to compensate them for BrandenburgOs delayed opening according to reports in the German media. May 8, 2012

Lufthansa confirms that its new UK routes to Berlin from Birmingham and Manchester will go ahead as planned on June 3.E But these once daily services will now operate to and from the cityOs existing Tegel airport and not the new Brandenburg facility whose opening has been postponed. Lufthansa also confirms that its current three times a day service out of Heathrow (which currently operates into Tegel) will remain unchanged on and after June 3. As yet there is still no timescale as to when Brandenburg will open. However, aEReuters report now suggests that the opening might be delayed until 2013. An official announcement is expected later today. Lufthansa had planned a significant increase in operations at Berlin to coincide with the opening of the new airport. The carrier now intends to operate these out of Tegel instead. May 8, 2012

Lufthansa Group posts U381million 1Q net loss; will eliminate 3,500 administrative jobs. Lufthansa Group reported a first-quarter net loss of U397 million ($521.9 million), reduced from a U507 net loss in the year-ago quarter. The Group also announced it would eliminate 3,500 administrative jobs worldwide over the coming years as part of its cost-cutting measures to improve operating results by U1.5 billion by the end of 2014. LH said in a statement that increased fuel costs, the air traffic tax imposed in Germany and Austria, as well as costs associated with emissions trading in force in Germany since 2012 all had an adverse effect on the operating results. "Higher taxes, fees and charges put a massive strain on our quarterly result. It was well down on last year despite record revenue,O LH chairman and CEO Christoph Franz said in a statement. OWe cannot wait until politicians also recognize the damage that one-sided taxes and charges do to aviation and to Europe's reputation as a place to do business.O First-quarter revenue was U6.6 billion, up 5.6% year-over-year, mainly due to higher traffic revenue stemming from a higher sales volume and price increases in the passenger business. Cash flow from operating activities rose to U833 million and made it possible to generate a free cash flow of U540 million. Traffic revenue improved 5.6% to U5.3 billion. Overall, operating income increased 2.5% to U7.2 billion in the reporting period. Operating expenses rose 6.1% in the first quarter to U7.6 billion, mainly due to a 23% increase in fuel costs. Concerning the job-cut announcement, Franz said, "We can only safeguard jobs for the long term and create new openings if we reorganize the administrative functions and accept job losses now." For the full year 2012, the Group expects revenue growth to be similar to the previous year. Operating profit is predicted to be in the mid-three figure million euro range. May 7, 2012

Lufthansa to focus on cost cuts before deals. Lufthansa said on Wednesday it had no plans to veer from its cost-cutting path to focus on acquisitions but would still look at assets up for sale, such as Portugal's flag carrier TAP. "Of course we look at opportunities," a spokesman for Lufthansa said after its chief executive Christoph Franz told the Financial Times he would look at the case for buying TAP. "But the focus is currently definitely on consolidation of the existing portfolio and not on acquisitions," the spokesman said. Portugal's government has promised to sell off TAP, possibly this year, under the terms of a EURU78 billion (USD$100 billion) European Union/International Monetary Fund bailout. The carrier has attracted the interest of several international operators, including International Airlines Group (IAG), thanks to its fast-growing routes to South America and Africa. Portugal's Prime Minister Pedro Passos Coelho courted Lufthansa on a trip to Germany last year, saying TAP would be a "good investment" for a German company. But Lufthansa is still grappling with the consequences of its last shopping spree, which added loss-making Austrian Airlines and bmi to its stable of carriers, among others. It recently sold British carrier bmi to IAG, having failed to turn it around, is restructuring Austrian Airlines and has announced 3,500 job cuts as it tries to improve earnings in the face of competition from low-cost airlines and Middle Eastern carriers. "I believe Lufthansa is consolidating (its existing businesses), so there is no desire to make takeovers," Metzler analyst Juergen Pieper said. Lufthansa CEO Franz said he would nonetheless not rule out acquisitions if there were valuable targets. "(TAP) is one of the larger carriers who manage the gateway to Latin America, and that is clearly a good reason to at least listen if your colleagues (at TAP) are giving you a phone call," the FT quoted Franz as saying. May 7, 2012

Lufthansa will launch 2X-daily Munich-Rotterdam Bombardier CRJ900 service Oct. 1, operated by LH CityLine. May 10, 2012

Berlin Airport Opening Will Be Delayed. The opening of Berlin's new airport, scheduled for June 3, will be delayed due to problems with fire security, German media reported on Tuesday, citing local government sources. The reports did not give a new opening date for Berlin-Brandenburg Airport, which aims initially to attract up to 27 million passengers annually. Lufthansa and Air Berlin plan to expand services and routes at the new airport, which is built on the existing Schoenefeld site in Germany's capital. Schoenefeld and Tegel are to shut shortly. Together they handled 24 million passengers annually, fewer than half the number at Germany's main airport in Frankfurt. May 8, 2012

Lufthansa CFO Gemkow to be replaced by bmi CFO Menne. Lufthansa Group said Monday it has reached a Omutual agreementO with CFO Stephan Gemkow under which he will leave the German airline company June 30. He will be replaced by British Midland International (bmi) CFO Simone Menne, who will become the first-ever female to become a member of LufthansaOs executive board. Gemkow will become CEO of the German investment firm Haniel Group after his departure, Lufthansa said. MenneOs contract will run for three years, it added. She has been with Lufthansa in various positions since 1989, including serving as VP-finance and accounting at Lufthansa Technik from 2004-2010. Lufthansa recently completed the sale of bmi to International Airlines Group. Lufthansa executive board chairman Jrgen Weber said in a statement that Menne is an Oexperienced Lufthansa manager who is fully conversant with the Group and our industry. In the difficult economic and political conditions prevailing in the aviation industry, that is the best prerequisite for further successful stewardship of the important finance division.O Lufthansa reported a disappointing first-quarter loss and said it would eliminate 3,500 administrative jobs worldwide. May 8, 2012

Lufthansa Unlikely To Seek Middle East Tie-Up. Lufthansa is very unlikely to agree to form an alliance with any Middle East airline, the German carrier's chief executive Christoph Franz said at its annual general meeting on Tuesday. Gulf carrier Etihad, which competes with fast-growing Emirates, raised its stake in Germany's second-biggest airline after Lufthansa, Air Berlin, last year and recently bought 3 percent of Ireland's Aer Lingus. May 8, 2012

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Date:May 14, 2012
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