In 2015, the Lufthansa Group generated revenues of €32.1bn, a 6.8% increase on the previous year. The Adjusted EBIT increased by 55% to €1.8bn. Hence, the result sits within the forecast range defined last October, even including some €100 million earnings impact as a result of strikes in the fourth quarter. With the exception of Lufthansa Cargo, all business segments contributed to the significant earnings improvement. The Adjusted EBIT for the Group’s passenger airlines more than doubled, and the two biggest service companies, Lufthansa Technik and LSG SkyChefs, both posted double-digit percentage earnings growth.
The Lufthansa Group further improved its financial stability in 2015. The year-end equity ratio stood at 18%. Liquidity increased, net indebtedness declined, free cash flow increased significantly to more than €800 million and Deutsche Lufthansa’s ratings were confirmed. Return on capital employed (ROCE) also improved significantly to 7.7%. As a result, the Lufthansa Group created value of €323 million in 2015.
The Lufthansa Group’s good result is mainly attributable to the significant increase in its passenger airlines’ earnings. The Adjusted EBIT of the Passenger Airline Group amounted to €1.5bn (compared to €701 million for 2014), doubling the Adjusted EBIT margin to 6.1%.
The Adjusted EBIT of Lufthansa Passenger Airlines increased by 143% to €970 million. Results for Eurowings (including Germanwings) are also consolidated in these numbers. Eurowings alone (which will be reported separately from 2016 onwards) achieved an Adjusted EBIT of €8 million on revenues of €1.9bn – a performance that exceeds the 2015 target of a break-even for the Group’s point-to-point business. SWISS International Air Lines achieved earnings of €429 million, an increase of 54%, and an EBIT margin of 9.4%. Austrian Airlines also posted clearly positive earnings of €52 million (compared to €9 million in 2014).
The earnings contribution of Lufthansa Cargo declined 40% to €74 million. The airfreight market had seen sizeable overcapacities from the beginning of the 2015 summer flight plan onwards, with a correspondingly negative impact on Lufthansa Cargo’s load factors and yields. Cargo earnings were also depressed by the strike actions at Lufthansa Passenger Airlines in the important fourth-quarter period. Lufthansa Technik and LSG SkyChefs continued their growth. Excluding gains from exchange rate movements, both companies raised their revenues by almost 10%. Lufthansa Technik posted earnings of €454 million, up 19.5%; and LSG SkyChefs’ earnings rose 12.5% to €99 million.
“With the Germanwings tragedy, 2015 was an emotionally very challenging year for the Lufthansa Group,” says Carsten Spohr, Chairman of the Executive Board & CEO of Deutsche Lufthansa AG. “The numerous strikes were a further burden. Nevertheless, we continued to successfully work on our Group’s future viability. And our strategic realignment is progressing well.”
“2015 was a good year in economic terms,” Spohr continues. “The doubling in the passenger airlines’ result is not only due to lower fuel costs, but also to the favorable developments in our passenger volumes and to our capacity discipline. The result also confirms that our focus on quality in both the premium and the point-to-point segment is the right approach. And the very good results from Lufthansa Technik and LSG Sky Chefs further affirm that the Lufthansa Group is on the right track.”
“For 2016 we are aiming to increase our result for the Lufthansa Group again,” Spohr adds. “We aim to enhance the profitability of our hub airlines by further modernizing their fleets and further increasing efficiency. We will only grow capacity where our cost structures are competitive. We will expand Eurowings substantially and enlarge the route network. We will foster innovations in all business areas and make travel for our customers even more pleasant and simpler through digitalization and corresponding new offers.”