A safe journey is what Deutsche Lufthansa AG promised its shareholders in the annual report for 2011. The Company has kept its word and delivered a solid result for the past financial year in what was again a difficult operating environment. Revenue of EUR 28.7bn, an operating profit of EUR 820m and over 100 million passengers, more than ever before in the Company's history, were some of the figures for 2011 that Christoph Franz, Chairman of the Executive Board and CEO, presents to those attending the Annual General Meeting of Deutsche Lufthansa AG today in Cologne. Franz said, "We have brought our result back home safely. The steep rise in fuel costs, the European debt crisis, political unrest, special levies and taxes as well as the night-flight ban in Frankfurt did not make it an easy journey." The net result for the year 2011 was EUR -13m. In 2011, the Group did not meet the conditions defined in its dividend policy for the distribution of a dividend. The Executive Board and Supervisory Board are nevertheless proposing to pay a dividend of EUR 0.25 per share at today's Annual General Meeting. "We decided to make an exceptional departure from our dividend policy to let our shareholders participate in the solid operating performance of their Company on a continuous basis. The negative valuation effects are mainly due to the disposal of British Midland and are a non-recurring expense for the Group. In fact, the sale will deliver a lasting boost to our profitability", says Christoph Franz.
The political environment in Germany and Europe is nevertheless making it difficult for the Group to improve its earnings position. The introduction of the air traffic tax and the European emissions trading scheme, the night-flight ban in Frankfurt and the absence of a single European airspace have added expenses of some EUR 700m for Lufthansa in the current year alone, according to Franz, who emphasises, "The airlines' role as an engine of the economy, as a driver of growth, jobs and prosperity is increasingly under threat. As an export nation, Germany needs mobility more than ever. We are not asking for subsidies. But air traffic needs much more local support than it gets at present. We will only make headway if there is cooperation between airlines, politics and society.
Making headway is also the objective of Lufthansa's SCORE programme, to which all business segments, airlines and Group functions will contribute individually. It aims to increase the operating result compared with 2011 by at least EUR 1.5bn by the end of 2014, in order to secure the necessary investment in the Company's future. On the programme's strategic objective, Franz adds, "We want to remain the number one in Europe and stay among the leading global airlines. To do so we have to safeguard our market shares and grow with the market. This we can only achieve with a modern, quiet and fuel-efficient fleet, especially in order to remain competitive in the face of rising fuel costs. The Group has ordered 168 aircraft with a list value of around EUR 17bn for delivery by 2018 alone. We want and have to earn the money for this investment under our own strength. With SCORE, we will steer Lufthansa from a position of strength into a safe future and a world of opportunity.”