Low oil price sends Lufthansa profits soaring

FRANKFURT - Agence France-Presse

AFP photo

German airline Lufthansa said on March 17 that low oil prices and booming passenger business sent profits soaring in 2015, a year marred by the Germanwings crash and drawn-out industrial action by pilots and crew.

Lufthansa chief executive Carsten Spohr described last year as an “emotionally challenging year” due to the crash of a passenger jet in March belonging to its low-cost subsidiary Germanwings, killing all 150 people on board.

“2015 was a very, very sad year. It was a year of extremes,” he told the group’s annual earnings news conference.     

“Emotionally, it was the most difficult in the company’s history, but at the same time, it was one of the best in Lufthansa’s financial history,” Spohr said.

In addition to coping with the fallout from Germanwings disaster, the German carrier also battled two long and bitter separate industrial disputes with pilots and cabin crew over pay and pension provisions, during which there were repeated walkouts, including a record seven-day stoppage in November.

At the core of both disputes is Lufthansa’s declared strategy to keep pace with budget rivals by trimming personnel and labour costs.

Nevertheless, “2015 was a good year in economic terms,” Spohr said.

Net profit soared to 1.7 billion euros ($1.9 billion) in 2015, from just 55 million euros a year earlier.

Underlying or operating profit grew by 55.2 percent to 1.8 billion euros and revenues were up 6.8 percent at 32.1 billion euros.

“The doubling in the passenger airlines’ result is not only due to lower fuel costs, but also to the favourable developments in our passenger volumes and to our capacity discipline,” CEO Spohr said.