Andrzej Jeziorski/MUNICH

The Asian economic crisis has failed to dent the performance of two of Europe's flag carriers, with Germany's Lufthansa Group and Swissair owner SAir Group showing big increases in pre-tax profits for the first six months of 1998.

The Lufthansa Group's pre-tax profits on ordinary activities in the period rocketed 134% to DM928 million ($515 million), with an extra DM 377 million coming from the sale of its stake in Hapag Lloyd. Net earnings after tax were DM924 million, DM767 million more than the previous year.

A 0.4% increase in overall load factors, to 69.6%, combined with cost-cutting measures and the stability of personnel expenses, all contributed to the profit boom, says Lufthansa. Group turnover for the first six months reached DM10.6 billion, a 7.6% increase over the previous year.

Passenger traffic grew 10.5% to 19.44 million, yielding a 7.6% rise in passenger income to DM7.4 billion. Freight traffic dropped 0.5% to 809,000t, although income grew 2.7% to DM1.8 billion.

Lufthansa says it experienced the strongest growth on European and North Atlantic routes and says that it was not seriously affected by the Asian situation.

"The year before we had increases of 25% and more [in turnover] in the region. We do not have that now, but our revenues in the region are spread over many countries," says the airline. India, China and Japan performed well, compensating for losses elsewhere.

SAir Group says the Asian crisis did leave its mark "in some business sectors", although overall results were boosted by 1996 cost-cutting measures. Group operating revenue totalled SFr5.34 billion ($3.54 billion) compared with SFr4.8 billion the previous year. Pre-tax profit was SFr302 million against SFr251 million last year.

Results for the Swiss company's SAirLines division, incorporating Swissair, Crossair and Balair/CTA, exceeded expectations and showed strong growth both in Europe and the USA.

Source: Flight International