Lufthansa: too bullish on LCC threat?

摘要

In June Jurgen Weber handed over control of Lufthansa to the new CEO Wolfgang Mayrhuber. Weber had successfully transformed Germany's old flag-carrier dinosaur into one of Europe's foremost European network carriers and left his successor with a company that has one of the best balance sheets in the industry (at the end of 2002 the Group had net debt of about EUD 1.75bn against equity of EUD 4bn, by far the best ratio among the Euro-majors). However, in May, Lufthansa announced its first quarter results, one of its worst ever -net losses of ?356m against losses of EUD 186m in the prior year period; revenues down by 4.6% to EUD 3.7bn; and operating losses of EUD 415m compared with an operating profit in the same period last year of EUD 12m. And now Lufthansa may be facing a major threat - the insurgence of the LCCs in its home market.