Lufthansa orders 108 new Airbus, Boeing jets for 9 bn euros

Lufthansa, Europe's biggest airline, said it plans to order eight long-haul aircraft and 100 short- and medium-haul aircraft from Airbus and Boeing for a total 9.0 billion euros ($12.1 billion).

The purchases still have to be approved by Lufthansa's supervisory board. Delivery is scheduled between 2015 and 2025, the airline said in a statement late Tuesday.

That brings the total number of new aircraft that Lufthansa has ordered until the end of 2025 to 239 for a total price of 23 billion euros, which the carrier will pay for in cash or via loans.

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Given the magnitude of the investments, Lufthansa announced it would waive a dividend payment for 2012 and fully retain its net profit.

"Our aim is to allow our shareholders to participate sustainably in the group's future success. It is now all the more important to invest all available resources in the group in order to drive the future (investment) programme forward," said chief executive Christoph Franz.

"The group net profit will consequently be retained in full for the purpose of strengthening equity capital," he added.

Lufthansa said it flew back into the black last year, turning in net profit of 990 million euros compared with a loss of 13 million euros a year earlier.

But airline noted that its bottom line had been inflated by windfall gains from the sale of a number of investments.

Underlying or operating profit -- which included 160 million euros in restructuring costs -- fell by 36.1 percent to 524 million euros.

Revenues, on the other hand, grew by 4.9 percent to 30.1 billion euros, Lufthansa said.

"Profitability for an airline is not simply a given in the present industry environment, it is a good performance," Franz insisted. But he insisted Lufthansa "needs to perform even better."

In order to achieve this, Lufthansa has embarked on a massive cost-cutting and earnings improvement programme in order to sustainably lift operating profit by 1.5 billion euros by 2015.

As part of the programme, the airline is planning to shut down a number of its administrative sites, including its head office in Cologne, it said.

Lufthansa is scheduled to released full 2012 results on March 14.

© 2013 AFP

Source: AFP
Date: Feb 20, 2013