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Friday, Apr 26, 2002

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`Lufthansa has no plans to raise fares now'

Ashwini Phadnis


DESPITE a five-fold increase in insurance costs to euro 170 milllion during 2002, Lufthansa, which reported an operating profit of 28 million euros for 2001, has no immediate plans to impose any additional passenger surcharge or increase its fares.

"There are no plans at the moment to impose any additional passenger surcharge or increase the air fares to offset the increase in insurance costs," its Chairman and Chief Executive Officer, Mr Juergen Weber, told Business Line.

Responding to a question on the India-China market, Mr Weber said the market had tremendous potential. "China is a big growth market in the future and Lufthansa will make every effort to tap this market with its partner airline Air China," Mr Weber said.

Announcing the financial results for the period January-December 2001, Mr Weber said the airline carried 46 million passengers which was 2.7 per cent fewer than what it had carried during 2000. However, the Asia-Pacific region, which includes India, saw a 3.2 per cent increase in passengers flown to 2.8 million during 2001 as compared to the previous year.

However, the results announced on Thursday are well below the euro1 billion figure which the airline was hopeful of achieving till it like several other airlines around the world were affected by the September 11 attacks.

Commenting on the results, the Chief Financial Advisor, Dr Karl Ludwig Kley, said the results for 2001 were marked not only by the events of the last year but also by the changes in the range of consolidated companies making up Lufthansa. "A total of 91 enterprises affiliated to the LSG group and six subsidiaries of Lufthansa Technik were consolidated for the first time. At the same time, the Globe group was demerged," Dr Kley said.

Further, the airline has decided that the results for the first quarter of 2002 will be released on May 15. Officials expressed confidence that the airlines will report better results.

For 2002 as whole, Lufthansa expects a markedly improved operating results compared with 2001," Mr Weber said. The airlines management report for 2001 shows that advance bookings and the actual course of business in the first few weeks of 2002 point to a slight recovery in air traffic compared to October 2000.

To capitalise on this, Lufthansa plans to put back 10 aircraft, which were grounded after the incidents of September 11, back into operations, and in particular, will progressively extend the available capacity on the North Atlantic routes.

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