Lufthansa chief executive Carsten Spohr confirmed this week that the group intends to make an non-binding offer for Thomas Cook’s German airline Condor with an option to acquire the remaining airlines of the British travel group.
“We decided yesterday in the meeting of the management board to bid for all of Condor with the option to be able to extend this (bid) to all Thomas Cook airlines,” Spohr told Reuters.
Thomas Cook put its profitable airlines business up for sale in February after a profit warning. May 7 was the deadline the group gave for interested parties to submit their interest. Indigo Partners has also been linked with the bidding process but has not publicly confirmed its interest.
At Lufthansa’s annual general meeting (AGM), the group emphasised its focus on growth, proposing a dividend of 0.80 euros per share. Based on the year-end closing price in 2018, the dividend yield would amount to four percent.
"Lufthansa Group has become even stronger, more efficient and more modern," says Spohr, Chairman of the Executive Board of Deutsche Lufthansa. "We are Europe’s number one."
In 2018, Lufthansa Group revenue rose to a €35.8 billion euros. At €2.8 billion, adjusted EBIT was only slightly below the previous year's level, despite a significant burden due to fuel costs that increased by €850 million, one-time expenses for the integration of parts of Air Berlin, and significantly higher expenses for delays and flight cancellations. As a result, the adjusted EBIT margin also declined slightly to 7.9%. The group’s network airlines – Lufthansa, SWISS and Austrian Airlines – exceeded their previous year's results. In addition to continued strong demand, the good result was based in particular on further cost reductions. Unit costs adjusted for fuel and currency effects were reduced by 1.7% in 2018.
For the full year 2019, Lufthansa Group said that it continues to expect revenue growth in the mid, single-digit range and an adjusted EBIT margin of 6.5 to 8.0%.
At the meeting, Lufthansa Group, expressed its consist focus on innovation, investing a further €2.5 billion in new seats in all classes, a significantly larger lounge offering and the expansion of digital services.
Lufthansa Cargo is pushing ahead with the consistent digitalisation of the freight chain, while Lufthansa Technik continued to innovate and build its digital business models. Lufthansa Group states that it is examining whether LSG could have “even better development opportunities with a new ownership structure”.
Lufthansa Group has currently ordered 221 aircraft, which will be delivered to the group by 2027.
"We need growth. But we do not need blind growth, we need high-quality, sustainable growth. Tickets for less than ten euros – as offered by some of our competitors – are economically, ecologically and politically irresponsible," says Carsten Spohr.
With a view to operational stability, the Lufthansa Group has significantly reduced its planned growth. The company is also investing around €250 million in more than 400 individual measures. The number of spare aircraft has been increased to 37, additional buffers of five to ten minutes have been planned into the ground times of aircraft and 600 additional employees have been hired to stabilize flight operations.
At the AGM, Spohr used the platform to advocate a united Europe. "Only the achievements of the European Union made it possible for the Lufthansa Group to become number one in Europe. With 3,000 flights per day within Europe alone, we connect people in Europe with each other – and with our long-haul flights, we connect Europe with the world. That is why we want to take a stand and stand up for the European idea. For a united and free Europe. We at Lufthansa say 'Yes' to Europe out of deepest conviction," says Spohr.