Sturdy performance lifts Lufthansa result

Lufthansa put in a sturdy performance in the first three months of 2006 despite
record-level oil prices. In the traditionally weak first quarter, the Group result
improved by 15.5 per cent to -98 million euros.The operating result totalled -75
million euros (previous year: -26 million euros). Adjusted for changes in the group
of consolidated companies, the operating result would have been -47 million euros.
“The result is in line with our expectations. The first quarter is normally weak in
the airline business,” said Lufthansa Chairman and CEO Wolfgang Mayrhuber,
presenting the quarterly figures. “Lufthansa is staying on course despite a
headwind. Even with an oil price of more than 70 dollars per barrel, our strategy is
helping with innovative products to convince and gain new customers.” The Lufthansa
Chairman is looking confidently to the full year and is still expecting an operating
result at least on a level with the previous year’s (2005: 577 million euros).

Lufthansa will continue pursuing its strategy of offering attractive prices coupled
with the highest quality. It has since April been offering round-trip fares starting
at 99 euros on flights from Germany to all European destinations. The response is
highly positive. Lufthansa has also made gains in premium business: Following its
great success in Central Europe, the Lufthansa Private Jet service is now also
available for flights to and from airports in the entire Russian Federation.

 

The integration of SWISS is making good headway, Mayrhuber observed. “Our customers
are profiting from coordinated flight schedules, the integrated Miles & More
frequent flyer programme and the joint presence of the two airlines at an increasing
number of airport terminals.”

 

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The Group has reached a major milestone in the restructuring of its LSG Sky Chefs
catering arm in North America. Changes in the pay settlement and long-term lease
agreements will save around 50 million dollars yearly.

 

Wolfgang Mayrhuber underlined that the Group will remain focused on rigorous cost
management and increasing flexibility. “The fuel price has more than doubled in the
past two years. That shows how important it is in our industry to act with foresight
in improving the cost structure and productivity. We must act today so as to be
among the winners again tomorrow.”

 

The action plan, launched in 2004 and designed to improve earnings by 1.2 billion
euros by year-end, is working successfully to plan, the Chairman emphasised.
Sustainable savings totalling 985 million euros had been realised by the end of
March, he noted.

 

Lufthansa will continue beyond 2006 to seek possibilities of strengthening its
clout. “We save in order to grow, not vice-versa. We are re-investing savings in new
routes, new products and attractive prices. And that is creating perspectives for
all: for our customers, for our shareholders and for the people employed by the
entire Group,” said Mayrhuber.


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