LUFTHANSA achieved a growth in profits for the first nine months of 1995, despite the massive exchange-rate losses which have blighted German industry all year.
The German airline's pre-tax profits, before special items, showed a modest DM4 million ($2.9 million) improvement on the corresponding figure for last year, reaching DM506 million on a turnover of DM14.2 billion. Revenues were up 4.7% on 1994.
"The success of our recovery programme was not a nine-day wonder," says executive board chairman Jurgen Weber. "If the currency rates had not spoiled our business performance, the higher output we achieved would have been reflected in a super result."
The strong German mark and low US dollar cost Lufthansa DM440 million. Exchange-rate losses slashed revenues in ordinary business activities by DM420 million. This was counterbalanced by lower costs in purchasing goods and services abroad because of the mark's strength, which reduced the net losses in ordinary business activities to DM230 million.
The remaining DM210 million of the total exchange rate loss was caused by write-downs on foreign-currency receivables, and provisions for financial leasing obligations. These losses were partially offset by a DM184 million profit from aircraft sales.
The airline says that costs for all the companies in the group were below projected levels - 2.9% below in the case of parent company Lufthansa. Comparisons with 1994 figures are of little value because the spin-off of Lufthansa Cargo, Lufthansa Technik and Lufthansa Systems has radically altered the structure of the group.
Lufthansa invested a total DM809 million in the first three quarters, more than half of which went on purchases and down-payments on new aircraft, all of which were covered by cashflow.
Group passenger numbers rose by 8.9% and freight traffic grew by 11.7%. Passenger load factors averaged 71.3%, a 0.8% increase on 1994, while the overall load factor grew by 0.1%, to 70.5%.
The parent airline increased its sales in passenger-kilometres by 10.1% against a 6.4% increase in seat-kilometres offered.
Source: Flight International