The recession and resulting demand decline "left their mark" on Lufthansa Group's first-quarter performance, Chairman and CEO Wolfgang Mayrhuber and other senior officials said in a note to shareholders yesterday, pointing to steep drops in business passengers and cargo in explaining a net loss of €256 million ($333.8 million) on a more than 10% decline in revenue.
Lufthansa was not immune to the global economic downturn, reporting a first-quarter net loss of €256 million ($333.8 million) that represented a reversal from the €44 million profit reported in the first three months of 2008. It cited "weak demand" as the principal reason for the result, which also included a €44 million operating loss that compared to a €172 million operating profit in the year-ago period. Revenue fell 10.7% to €5 billion.
China Eastern Airlines posted a CNY40.1 million ($5.9 million) net profit in the first quarter, down 81% from the CNY210.8 million earned in the year-ago period, on a 15.6% decrease in operating revenue to CNY8.95 billion. Operating expenses dropped 12.8% to CNY 8.42 billion. The Shanghai-based carrier credited CNY422 million in earnings on its fuel hedges and the return of CNY500 million in aviation construction funds for the result.
Frontier Airlines and Lynx Aviation parent Frontier Airlines Holdings, which is operating under bankruptcy protection, reported a $161 million net loss in the quarter ended March 31 and an $18.9 million profit excluding reorganization expenses. Year-ago figures were not provided. Consolidating operating profit was $20.7 million. At the Frontier mainline, unit revenue fell 3.4% to 9.5 cents and unit cost was down 19.8% to 8.32 cents, or down 7.3% to 6.08 cents excluding fuel. Capacity was cut 20.3% year-over-year.
A $57.9 million loss on its fuel hedges was the key driver in a 34.7% year-over-year drop in LAN Airlines' first-quarter profit, a $65 million surplus that compared to the $99.6 million reported in the first three months of 2008. First-quarter operating revenue dropped 14.5% year-over-year to $882.2 million against a 13.4% decline in costs to $764.1 million. Operating profit fell 21% to $118.1 million from $149.5 million in the year-ago quarter.
Hawaiian Airlines parent Hawaiian Holdings earned a $23.5 million profit in the first quarter, reversed from a $19.9 million loss in the year-ago period when it still faced competition from defunct Aloha Airlines and ATA Airlines. "The benefits of a significant decline in the price of fuel more than offset the consequences of weaker demand for Hawaii vacations, while several years of diligent cost control in areas of expense that we influence added to the overall results," President and CEO Mark Dunkerley said.
AirAsia carried 3.1 million passengers in the first quarter, up 21% year-over-year, according to figures published by the Centre for Asia Pacific Aviation. Traffic measured in RPKs rose 17% against a 19% increase in capacity, lowering load factor 2.4 points to 69.7%. SAS Group airlines flew 2.08 billion RPKs in March, down 16.9% from the year-ago month. Capacity fell 3.9% to 3.22 billion ASKs, lowering load factor 10.2 points to 64.5%. At SAS Scandinavian Airlines, yield climbed 2.6% year-over-year as RPKs dropped 17.9% to 1.92 billion.
Garuda Indonesia reported a IDR669 billion ($61.3 million) profit in 2008, a massive increase from the IDR60 billion earned in 2007, the Antara national news agency reported.
CAE signed a technical training and courseware agreement with Jazz Air under which the regional will license maintenance training programs to CAE, expanding the company's commercial type training program portfolio.
Thales announced that its microwave landing system received UK approval for ground installations for Cat IIIb operations at London Heathrow. Thales received European certification for its onboard aircraft installations to Cat IIIb in November 2007. British Airways is the first airline to implement the system, using it on its LHR-based Airbus single-aisle fleet throughout 2008. The system became fully operational on March 25.
JDA Aviation Technology Solutions of Bethesda, Md., entered into a partnership with UK-based EQ2 to launch an environmental management system, EQ2-EMS, designed to allow operators to analyze emissions and their impact on operating costs.
Japan Airlines now expects to report a ¥63 billion ($651.3 million) loss in its fiscal year ended March 31, nearly double the ¥34 billion it forecast in February, owing to a "relentless" decline in global demand.
Aeroflot transported 604,600 passengers in March, a 16.5% fall from the year-ago month. Load factor was down 8.1 points to 60.7%. LAN Airlines flew 2.47 billion RPKs in March, up 7.6% from the year-ago month. Capacity increased 12.5% to 3.25 billion ASKs, reducing load factor 3.4 points to 76.1%.
SAS Group narrowed its first-quarter loss by nearly 36% to SEK748 million ($91.4 million) from the SEK1.16 billion reported in the year-ago period, although it said that "uncertainty with regard to when recovery will begin is considerable" and that it is pressing ahead with its Core SAS efficiency program.
Air Berlin said the German Federal Cartel Office approved Pegasus Airlines parent ESAS Holding's acquisition of approximately 15% of the voting shares in AB ( ATWOnline, March 31). It also announced the establishment next month of a Corporate Users Advisory Council that will "monitor the development of the business travel sector" and "offer a more effective and flexible response to immediate market conditions." Former German Travel Management Assn. Chairman Michael Kirnberger will head the council.
Aer Lingus yesterday said that its full-year loss "will be materially below the bottom of the range of current market expectations" and that it is reorganizing its senior management structure in order "to safeguard the long-term viability of the group," according to Chairman Colm Barrington. The Irish carrier said six weeks ago that it expected its operating loss this year to be "larger" than the €159.5 million ($209.7 million) posted in 2008 ( ATWOnline, March 12).
Finnair reported a first-quarter loss of €18.6 million ($24.5 million), reversed from a €3.1 million profit in the year-ago period, as "the potential for profitability has run into the sand due to feeble demand and a collapse in price levels," President and CEO Jukka Hienonen said.
China Southern Airlines reported a CNY222 million ($32.5 million) first-quarter profit, down 71.3% from the CNY796 million earned in the year-ago period, on a 9.4% decrease in operating revenue to CNY12.93 billion. Operating expenses climbed 3.3% to CNY13.71 billion, and analysts credited "the return of a CNY1.07 billion aviation construction fund" for the profit. Foreign exchange losses played a role in the year-over-year decrease. The Guangzhou-based carrier did not release further figures.
LOT Polish Airlines is nearing insolvency, Management Board President Sebastian Mikosz was quoted as saying by the Warsaw Business Journal and Rzeczpospolita, which reported that the auditor is unwilling to sign off on the airline's accounts and that its survival is uncertain. It lost €155 million ($203.8 million) last year and reportedly does not have the cash to pay its bills. Mikosz said layoffs will be necessary and that new investment or acquisition by a competitor are the most likely solutions to the crisis.
Ukraine International Airlines posted a $6.2 million profit in 2008, its ninth consecutive year in the black. It reported a $12.9 million profit in 2007. Revenue last year was $371 million, up 36%, and operating profit rose nearly 20% to $22 million. It said the bottom line was impacted by a $7.6 million foreign exchange loss. UIA currently operates 17 737s.
Airlines scheduled 6% fewer flights this month compared with April 2008, with a 3% drop in seat capacity, according to the latest statistics from OAG. It marks the ninth successive month of declines and represents a reduction of more than 136,000 flights and 9 million seats year-over-year. Flight schedules within Europe are down by 8% while capacity is off 7% with 4.7 million fewer seats on offer. Figures for North America show downturns of 9% in domestic frequencies and 8% in capacity, with a 6% drop for flights and capacity to/from the region.
Air India parent National Aviation Co. of India announced that Ministry of Civil Aviation Joint Secretary and Financial Adviser Bharat Bhushan will serve as interim chairman and MD replacing Raghu Menon. Bhushan, 54, has held a variety of government positions for the past 30 years. No reason was given for the government's decision to replace Menon, according to press reports from India. A search for a permanent replacement is underway.
Undisclosed asset sales prompted ANA Group to issue a revised guidance yesterday anticipating a smaller loss for the fiscal year ended March 31 than previously forecast.
Qantas announced a comprehensive review of its seating configurations, with many premium seats expected to get the ax as business travel plummets. The reassessment comes as QF is suffering the worst decline in business travel in decades with a fall of up to 30% in premium travelers, who are paying up to 50% less than the normal premium fare. CEO Alan Joyce conceded to ATWOnline yesterday that "we have too few seats on some of our aircraft," with premium seats making up 40% of the total on some.
