by Sally Peters March 18th, 2011
Germany’s Lufthansa Group has reported operating profits of €876 million for 2010.
The figure marks an impressive increase on those seen in 2009 when it posted profits of just €130 million as it emerged from the economic downturn. The company cited a number of factors for the improvement including increased demand in both its passenger and cargo business combined with a successful series of cost-cutting initiatives and other factors.
Nearly €400 million was generated by Lufthansa’s passenger services, however most other Lufthansa passenger brands did not fare well. UK-based subsidiary BMI posted losses of €145 million and Austrian Airlines saw losses of €66 million in 2010. Likewise, Germanwings also struggled, posting loses of €39 million. However, Swiss International trailed behind Lufthansa proper with operating profits of €298 million.
The company said via an official statement that Austrian Airlines and BMI had undergone numerous restructuring efforts throughout the year that had suppressed earning potential whilst Germanwings invested heavily in expansion plans. Meanwhile it said that previous investments such as the Airbus A380, the new Europa cabin and restructuring efforts had paid off for Lufthansa.
Looking ahead, Christoph Franz, chief executive of Lufthansa Group, said that 2011 would be challenging due to sky-high fuel costs, air duty increases and increased competition.