Lufthansa posts record profits

Lufthansa Chairman and CEO Wolfgang Mayrhuber has announced record net profit and
revenue at a press conference on the company’s annual result.During the
last year revenue increased by almost ten per cent to 19.8 billion euros, setting a
new record. Group profit after tax also climbed to a new peak at 803 million euros.
The operating profit was up by 46 per cent to 845 million euros. “We have a very
satisfying result in every aspect to show for 2006. The figures speak for themselves
and underline the successful course that has been set by the Lufthansa Group”,
said Mayrhuber. “The success of Lufthansa is based on the outstanding team
performance of our employees, our coherent strategy, the consistent tapping of
market potential, future-oriented investment policies and sustainable cost
discipline.” Record levels of customer satisfaction and passenger figures have led
to new jobs. “Our shareholders will also profit from this success, especially as
the Lufthansa share price rose by 67 per cent in 2006”, commented Mayrhuber. He
reiterated that the Executive Board and the Supervisory Board would be proposing a
20 cent higher dividend of 0.70 euros per share at the Annual General Meeting. The
Lufthansa Group remains optimistic for the current year and is confident that it
will again post an increase in operating profit.

The Lufthansa Chairman emphasised that the company had continued to focus on its
core competencies during the past year. The Group will achieve book gains of
approximately 500 million euros from the sale of its shares in Thomas Cook AG. “We
are sharpening our Group profile and creating value for our shareholders”,
explained Mayrhuber. All business segments recorded operating profit during the past
year. The key business segment, passenger transportation, closed with a profit of
400 million euros, equivalent to a 200 per cent rise in earnings. The Lufthansa CEO
explained that, “the Group’s customers valued the consistent and targeted
investments in the product” and added that, “while we continue to grow as a
whole, there is a significant and steady rise in the number of passengers that are
deciding to opt for First and Business class. Nonetheless, flying Economy with
Lufthansa remains a choice for quality and one that is still very popular.” The
new betterFly offer that was introduced throughout Germany in April was welcomed
with open arms. During the last year, a record 53.4 million passengers flew with
Lufthansa.

The incorporation of the quality carrier SWISS is progressing better and more
rapidly than expected. Last year, the partnership’s overall synergies totalled
more than 200 million euros and were significantly higher than the amount originally
forecast. “Our customers profit from this strong partnership and the success of
SWISS is already visible in the Group result.”

 

Wolfgang Mayrhuber stressed the role of aviation as a powerful engine for
employment, growth and innovation in Germany. “We want to continue to grow and
will be taking on 3000 new employees this year alone. This means that during 2006
and 2007 we will have generated 5500 new jobs, a figure equalled by hardly any other
company in Germany.” Mayrhuber made it very clear that in order to ensure
continued growth, better infrastructure on the ground and in the air would be
essential. “The harmonisation of air traffic control in Europe, the Single
European Sky, will reduce and avoid holding patterns and cut delays, making it the
largest consumer and environmental protection project in European aviation.
Furthermore, sustainable global potential can be achieved through the deployment of
state of the art technology, the optimisation of bureaucratic air traffic management
on intercontinental routes and the use of biofuel.” Referring to the one‑sided
calls for European airlines to create a stand-alone solution for emissions trading,
Mayrhuber underlined that, “the exclusive involvement of European airlines in
emissions trading would result in considerable competitive disadvantages in our
global industry and probably even increase emissions.” Although the aircraft is
the most advanced environmentally friendly and economical form of transportation for
distances in excess of 350 kilometres, the airlines have already taken the
initiative and are already doing everything in their power to reduce fuel
consumption and consequently emissions. He pointed out that the costs of kerosene
had almost doubled during the past two years and went on to add that, “we are
willing and capable of doing more for climate protection, the question is not
whether we will, but how we will.” Nevertheless, Lufthansa is leading the market
in terms of environmental protection, a fact that is supported by the Group’s
membership in the Dow Jones Sustainability Index. Europe must take the current
discussions as an opportunity to stand up for effective global solutions.
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