Lufthansa in fleet renewal

Lufthansa has agreed deals with both Boeing and Airbus to renew its fleet. 100 A320s are ordered, 70 of which are A320neos and A321neos, while 30 will be A320Ceos which helps Airbus further fill those A320 delivery slots in the run-up to the Neo. The carrier has also ordered six 777-300ERs for Swiss and two additional A380s for Lufthansa. That is 108 aircraft at over $9bn list price.
In the meantime before these aircraft are delivered Lufthansa remains in a period of needing to do more to cut costs if it to reach its target of €2.3bn operating profit by 2015. Especially given that operating profit declined 36% in 2012 to €524m. Already the 2012 dividend was cut to assist in aircraft delivery finance. In fact Lufthansa will remain flat on capacity with just a 1% increase forecast for 2013. Meanwhile though the airline admitted that fuel costs had increased by 18% in 2012 to nearly €7.4bn, but this is set to fall to €7.2bn in 2013 as older aircraft are removed from the fleet.
With Lufthansa though all eyes are on those staff costs and they, instead of falling are in fact increasing, by some 5.6% in 2012 to €7.05bn. It is here where more action taken over recent months will start showing through in the 2013 figures. Hopes are that 2013 will see profits close-in on the €1bn mark.