Profits plummet at Lufthansa Group

Year-over-year combined net profits for the passenger and cargo airline group’s business units fell more than 82% in 2014.    Lufthansa Group reported net profits of 55 million euros (U.S. $58.51 million) in 2014, 82 percent less than the 313 million euros in profits recorded in 2013.
   This result comes despite gains in the company’s freight division. Lufthansa Cargo increased operating profits 26.6 percent to 100 million euros for the full year.
   The company attributed the sharp decline in profits primarily to “a reduction in the market value of the exchangeable notes for JetBlue shares and the adverse impact of the changes in the value of fuel price hedging option,” according to a statement from the group. “The net result under IFRS was further burdened by the contractually-agreed sale of the infrastructure division of Lufthansa Systems AG.”
   Combined revenues for Lufthansa Group, helped by a 364 million-euro decline in fuel costs, were down .1 percent to 30 billion euros.
   “Our results for 2014 show us clearly where we currently stand,” Carsten Spohr, chairman & CEO of Deutsche Lufthansa AG, said in a statement. “On the one hand, all the business segments of the Lufthansa Group are profitable and, with an operating profit of almost EUR 1 billion, we achieved our projection in a far-from-easy year. At the same time, though, with our high investments in modern aircraft and premium services, we simply have to further increase our operating profit. For this we need competitive structures; and that’s what we continue to consistently work on.”