Benefiting from low fuel costs, strong demand and the collapse of Air Berlin, the German flag carrier has reported record profits for 2017. But the air is getting thinner at the top of the European aviation business.
Image: picture-alliance/dpa/Lufthansa
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The German airline group, whose shares have soared 85 percent in the last 12 months, said Thursday its net profit for 2017 had climbed by a third to €2.36 billion ($2.91 billion), as revenue rose 12.4 percent to €35.6 billion.
Adjusted operating profits shot up 70 percent to €2.97 billion because Lufthansa's unit costs — excluding fuel and currency effects — dropped 0.4 per cent in the year. Chief Financial Officer Ulrik Svensson said costs would have gone down further were it not for compensation paid to customers for flight cancellations at Air Berlin.
In a statement, Lufthansa CEO Carsten Spohr noted that cost reduction had been achieved, while becoming the only airline in Europe to be awarded a five-star rating.
"We are lowering our costs where this does not affect the customer, and are simultaneously further investing in our product and service quality," he added.
A new design for Lufthansa
Germany's flag carrier is giving its planes a newly designed logo. Passengers will have to get used to Lufthansa's new look — not for the first time, as DW business editor Dirk Kaufmann reveals in this slide show.
Image: picture alliance/dpa/B. Roessler
Scrapping the 'fried egg'
The most obvious change to Lufthansa's design can be seen by looking at the tailpiece. The rudder now has a blue varnish with a white crane on it. The former yellow circle — often dubbed the "fried egg" by mocking observers — is no longer. Also, the belly of the plane will now be sprayed white, instead of the former gray.
Image: Getty Images/AFP/C. Stache
The way we were
This Boeing 737-100, which Lufthansa started using in 1968, shows the design fundamentals we've grown used to over the years, from the grey spray on the belly to the black nose and the "fried egg" on the tailpiece. In a few years from now, this traditional design will have disappeared from the skies.
Image: picture-alliance/dpa/Lufthansa
The early bird
The first Lufthansa planes looked very different from the modern ones, obviously enough. The Junkers G 24 plane, as shown in the picture, did not feature the "fried egg." But look closely at the shuttle bus beside it and what do you see? The famous crane, there from the beginning. The heraldic bird was designed by graphic artist and architect Otto Firle.
Image: picture-alliance/dpa/Lufthansa-Bildarchiv
Pre-war, pre-corporate design
Check out this old design: a black nose and black engines, with the company's name on the side, barely legible right under the cockpit. It would take another generation before people started thinking about long-term corporate designs at Lufthansa and indeed, elsewhere.
Image: DW / Nelioubin
The swinging 1960s
Once in a while, the design was subject to some minor alterations. On this Vickers V-814 Viscount, pictured in 1968, the yellow crane logo on the rudder was relatively small. The Lufthansa lettering was a lot larger though, and the traditional blue and yellow colors stylishly embraced the whole fuselage.
Image: picture-alliance/dpa/Deutsche Lufthansa AG
Champions flying high
After Germany won the FIFA World Cup in Brazil in 2014, the plane carrying the footballers home was coated with a special Lufthansa varnish to mark the occasion. The "Fanhansa" jet even circled over the Berlin fan park before landing on home soil with the World Cup winners.
Image: picture-alliance/dpa
Different fuel, same brand
The basic design did not change for this A321, which was selected for flights when Lufthansa tested plant oil-fueled planes. It simply added "Lufthansa Biofuel Power" to its standard corporate design.
Image: Lufthansa Bildarchiv
Brand new everything
When an airline introduces a new design, it's not just the fuselage that needs a lick of paint. Every item carrying the old logo needs to be upgraded, from the seats in the cabins to the check-in desks around the world. Thousands upon thousands of items have to be replaced in the name of corporate consistency.
Image: dapd
The seven-year switch
This is a computer-generated image of a Boeing 747-8, replete with the new Lufthansa logos. This is what we will have to get used to seeing in the skies. The carrier reckons that it will take seven years before every plane is painted afresh. So stay calm — your senses will be given time to adjust.
Image: picture-alliance/dpa/Lufthansa
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Higher fuel costs, lower profit
Last year, Lufthansa group — which includes Eurowings, Swiss, Brussels Airlines and Austrian Airlines — was also able to bury a smoldering dispute with pilots. Settling the pay and pensions battle that had sparked multiple walkouts by the firm's 5,400 pilots bestowed a €582-million one-off windfall on the 2017 accounts.
Lufthansa was however forced to give up a plan to acquire leisure carrier Niki from Air Berlin due to competition concerns. It is now seeking to expand its Eurowings budget unit to fill the gap left by Air Berlin in Europe. It plans to increase total capacity by 9.5 percent this year, down from initial plans in January for a 12 percent increase.
Investors are concerned that European carriers are adding too many seats to the market this year, which could then put pressure on ticket prices again. CFO Svensson said pricing was "slightly positive" in the first quarter and the first half of 2018, but that the group did not have enough information to give an outlook for the second half of the year.
Looking ahead to 2018, the carrier aims for an adjusted operating profit "slightly below" last year's level, pointing especially to a forecast increase in fuel costs of around €700 million.
Lufthansa said it will offer shareholders a dividend of €0.80 per share, some 60 percent higher than last year's.
