Lufthansa profits defy downturn

The Lufthansa Group increased its offer and sales during the first nine months of
the year, defying the difficult economic environment and the Group achieved an
operating profit of 984 million euros after the third quarter.This was equivalent to a lesser result of 101 million euros
in comparison with the same period the previous year. The net profit for the term
was reported at 551 million
euros; during the same period last year this figure was at 1.6 billion euros;
however, it included 503 million euros of profit from the sale of the shares in
Thomas Cook, as well as book gains of 82
million euros from the repurchase of own stock by WAM Akquisition S.A. “This is a
respectable result taking into consideration the considerable strains being felt as
a result of the ongoing crisis in
the financial markets and the overall economic situation. During these critical
times, our focus is naturally on safeguarding our result. We possess the necessary
flexibility and operational
adaptability, and will be able to steer our company according to the demands of the
market. In addition, we are working on our productivity, our measures to improve
fuel consumption and the reduction
of external costs. All of these factors and the outstanding team performance by the
Group’s employees contribute to stability and offer us the opportunity to thrust
forward into new openings”,
commented Lufthansa Chairman and CEO Wolfgang Mayrhuber, speaking at the
presentation of the third-quarter.

Whereas the worldwide economic slowdown has particularly been felt in the Passenger
and Catering business segments, the operating results of the remaining Logistics,
MRO and IT Services business
segments have developed positively.

In the Passenger Business segment, the sharp rise in fuel costs and strike-related
losses, as well as the decline in demand caused by the state of the world economy,
all had negative influences on
the result. However, the attractive premium products, the selective expansion of the
route network and the successful integration of SWISS all played decisive roles in
ensuring sales growth in
comparison with the same period last year. Mayrhuber stressed that: “We will
continue to work on improving our offer with the expansion of our airline system and
with our strong alliances. Crises are
often the starting points for structural changes and we want to seize the
opportunities that will present themselves to us in this situation to ensure the
long-term consolidation of our position,
whilst still maintaining our financial basis.” Mayrhuber went on to add that a
modular system of essentially independent airlines with their own specific markets
would be the concept of the future to
join as many European markets as possible with the best possible results.

The Logistics business segment achieved a significant rise in revenue and an
improved operating result during the first nine months of the year. In the MRO
business segment, cost reduction and
efficiency improving measures resulted in a year-on-year rise in the operating
result. The IT Services business segment was also able to profit from targeted cost
management and achieved a
significantly improved operating result. The Catering business segment was
confronted with a negative exchange rate, a rise in material costs and one-off
effects, and was consequently unable to reach
the previous year’s good operating result. 

Mayrhuber underlined that Lufthansa was well-equipped to deal with the future and
stated that: “Lufthansa stands for reliability and works with foresight,
particularly in a difficult economic
environment. We keep an eye on maintaining a solid balance sheet, we maintain our
financial and operational flexibility, we offer what we can also sell and we invest
where it makes sense. We are
capable of something that many competitors are not: we are capable of mastering
crises whilst still remaining profitable and strong, and maintaining the
attractiveness of our company for our
shareholders, customers and employees.” The Lufthansa Chairman and CEO stressed that
the measures that had been introduced to ensure the stabilization of the result and
strict cost management would
continue to grow in importance. Altogether, the Executive Board expect the full-year
revenues for 2008 to be above those of the previous year. Based on its current
knowledge, the Group forecasts an
operating result of 1.1 billion euros. However, this forecast is subject to the
opportunities and risks associated with the major fluctuations to be expected from
the influencing factors of the
overall economic situation.