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Luxair To Post Loss For 2005  
User currently offlineRJ100 From Switzerland, joined Nov 2000, 4118 posts, RR: 29
Posted (8 years 6 months 4 weeks 1 day 22 hours ago) and read 2861 times:

Luxair posts a loss of 12 million Euros for the full year 2005.
They now decided to introduce a new fare system to be more competitive with low cost carriers. They also said they want to become more efficient (more rotations per aircraft per day) etc.

To be honest, I don't know if this is smart. If you want to offer low prices you need to have the right structures. Not sure if Luxair does have that.

Any comments, remarks?

Regards,
RJ100


none
18 replies: All unread, jump to last
 
User currently offlineLuxair From Suriname, joined Jan 2001, 851 posts, RR: 2
Reply 1, posted (8 years 6 months 4 weeks 1 day 20 hours ago) and read 2813 times:

I saw recently an article in wort.lu (Luxemburgish newspaper) that they even consider to get rid of all their Boeings and only continue with the Embraers to reduce their costs! That sounds not good at all!!!

Here is the article from Luxemburger Wort 04.02.06 (it's in german but maybe someone else can make a translation)

"Flotte vor der Restrukturierung"

In der kommenden Woche wird Luxair erste Resultate aus dem vergangenen Jahr veröffentlichen . Nach Informationen unserer Zeitung wird der Verlust im Linienfluggeschäft bei zwölf Millionen Euro liegen. Die Sitzauslastung in dem Bereich ist marginal um etwa ein Prozent angestiegen.

Im Jahr 2004 lag die Sitzauslastung bei den Linienflügen bei 50,78 Prozent . Insgesamt sei aber eine erhebliche Verbesserung beim Ladefaktor verzeichnet worden , erklärte ein Unternehmenssprecher gegenüber dem "Wort". Das dürfte vor allem der positiven Entwicklung bei "Luxair Tours" zu verdanken sein. Seit Jahren verzeichnet dieser Bereich zum ersten Mal wieder einen Gewinn in der Bilanz, war zu erfahren.


Nach wie vor positiv ist das Bodengeschäft mit dem Cargo-Handling verlaufen , sagte der Sprecher. Sorgenkind der Fluggesellschaft bleibt dagegen die Geschäftseinheit "Airline", wo die Linienflüge angesiedelt sind. Der Verlust, im Vorjahr noch bei 7,6 Millionen Euro, hat sich nach unseren Informationen auf zwölf Millionen Euro erhöht. Nach Angaben des Unternehmens drückten auch die erhöhten Kerosinpreise 2005 auf die Bilanz. Die Mehrkosten aus dieser Entwicklung hätten einen Anstieg von 60 Prozent zur Folge gehabt.


Während früher Verluste aus einem der drei Geschäftsbereiche von einer profitablen Einheit aufgefangen werden konnten, ist das seit vergangenem Jahr rechtlich nicht mehr möglich. Luxair setzt sich nun mit dem Effizienz-Programm "Building a new Airline" mit der Kostenstruktur des Unternehmens auseinander .


Bereits in einem McKinsey-Report, der noch aus der Ära "Heinzmann" stammt, haben die Unternehmensberater empfohlen, die Flotte effizienter zu gestalten und im Linienflugbereich auf die großen Boeing-Jets zu verzichten. Kleinere Maschinen wie die Embraer 145 reichten aus, um der Nachfragen an Linienflugsitzplätzen gerecht zu werden. Von Luxair hieß es dazu nur, dass die Gesellschaft derzeit die gesamte Flottenstruktur überprüft. Dabei stehen auch die Boeing-Jets auf dem Prüfstand."

Here is another articel from today 06.02.06 LuWort

"Linienflüge machen Luxair Sorgen

Aber positive Entwicklung bei den Gesamt-Passagierzahlen


Die Luxair hat ihre Linienflüge um 1,7 Prozent reduziert.


(vb) - Die Luxair sucht nach Wegen, die defizitären Linienflüge aus den roten Zahlen zu bringen. Die Luxemburger Fluggesellschaft gab am Montag bekannt, dass die Zahl der beförderten Passagiere auf Linienflügen weiter gesunken sei , diesmal um 1,6 Prozent. Aufgrund der positiven Entwicklung bei den Ferienflügen von Luxair Tours ergab sich jedoch ein Gesamt-Plus von 1,1 Prozent.

1,18 Millionen Menschen entschieden sich im vergangenen Jahr für Luxair, 2004 waren es 1,17 Millionen. Die Fluggesellschaft geht davon aus, dass der Bereich Linienflüge der Bilanz 12 Millionen Euro Verluste bescheren werden.

Unrentable Linien gestrichen
Aufgrund der Streichung unrentabler Linien wie die nach Athen und die Reduzierung der Flüge, zum Beispiel nach Budapest, ist die Auslastungsrate - in der Fachsprache "Sitzladefaktor" - gestiegen, und zwar von 61 Prozent auf 65 Prozent.

Auf hohem Niveau macht der Frachtbereich Zugewinne. 2005 gelang es der Luxair, die abgewickelte Menge an Gütern um 4,5 Prozent auf 796 000 Tonnen zu steigern. In den Jahren zuvor hatte der Frachtbereich mit Zuwachsraten um 20 Prozent die Luxair vor einem Verlust in der Bilanz bewahrt. "Durch die weltweit rückläufige Entwicklung im Luftfrachttransport ist der Zuwachs geringer als in den vorigen Geschäftsjahren ", schreibt die Fluggesellschaft.

Auch der Bereich Ferienflüge und Reiseveranstaltung der Luxair steht gut da. Die Zahl der Fluggäste nahm hier um 7 Prozent zu.

Mit dem neuen Generaldirektor Adrien Ney an der Spitze arbeitet die Fluggesellschaft eine neue Strategie aus, um die Effizienz der Flotte und des Streckennetzes auszubauen . Mit einer neue Preisstruktur soll die Position als qualitativ hochwertige Fluggesellschaft in der Großregion gesichert werden."

Anyway, I hope that they will come out of that crisis.



Marvin Lee Cooper
User currently offlineRJ100 From Switzerland, joined Nov 2000, 4118 posts, RR: 29
Reply 2, posted (8 years 6 months 4 weeks 1 day 20 hours ago) and read 2805 times:

Thanks for the interesting links.

If they want to compete with LCCs, wouldn't it be better to phase out the Embraers and keep the Boeings? With the Embraers they won't have the capacity to sell a lot of cheap tickets...

Regards,
RJ100



none
User currently offlineLuxair From Suriname, joined Jan 2001, 851 posts, RR: 2
Reply 3, posted (8 years 6 months 4 weeks 1 day 19 hours ago) and read 2803 times:

RJ100, You just hit the nail, that was the first thing I was thinking at. They better keep the Boeings if they will compete with LCC airlines, that makes sense at least.
Well, I don't realy understand because on one side they state that sheduled flights are getting to expensive and on the other side they will get rid of the Boeings but honestly I don't see them flying charter flights to the holiday destinations around the Mediterranean with only Embrears, or did I miss something?



Marvin Lee Cooper
User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 4, posted (8 years 6 months 4 weeks 16 hours ago) and read 2716 times:

Hello, first of all this will be my first post SO hello everybody

I think that at this moment luxair doesn't know what to do. They are having some competition from ryanair witch is at about 45m drive from Luxembourg. This is easy to see when you go to Hahn you will see cars from Luxembourg, France in great numbers. Their ticket prices are not cheap at all when you fly in Europe. I can't imagine luxair without boeing's. Maybe they will create a new airline and a new structure.


User currently offlineRJ100 From Switzerland, joined Nov 2000, 4118 posts, RR: 29
Reply 5, posted (8 years 6 months 4 weeks 16 hours ago) and read 2710 times:

Hi Aeroluxpt

Welcome to a.net!  Smile

Let's hope Luxair finds the way back to sucess. I heard that they made profits with the charter flights (or tour operating?) so they might use the 737s for this profitable part and maybe position themselves in the high yield niche with the Embraers...

Regards,
RJ100



none
User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 6, posted (8 years 6 months 4 weeks 15 hours ago) and read 2690 times:

Thanks RJ100
Luxembourg is a very small country but they have some important and profitable routes. Their very strong in the financial sector, they have the European parliament, etc. Some 20% of the population is Portuguese, 6% Italians and other nationalities I think they could use this in their favor.This type of client would fly more if the prices where right, and TAP only flies a A319 per day and their prices are also high. Make the prices right and you will get a plane full. London city is a very good route for Luxair they get a good load factor and well paid( this is the financial sector going to work).

regards,
aeroluxpt


User currently offlineYak97 From United Kingdom, joined Sep 2005, 118 posts, RR: 0
Reply 7, posted (8 years 6 months 4 weeks 15 hours ago) and read 2679 times:
Support Airliners.net - become a First Class Member!

LUX-LCY.

Both Luxair & VLM operate this route, up to 4 from Luxair & 3 from VLM. Who does better on the passenger figures?


User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 8, posted (8 years 6 months 4 weeks 15 hours ago) and read 2676 times:

I guess that they are about the same last time I heard Luxair a bit better but then again speculation. One thing is for shore VLM is flying the Fokker 50 and Luxair the Embraer 135.

User currently offlineCRJ900 From Norway, joined Jun 2004, 2180 posts, RR: 1
Reply 9, posted (8 years 6 months 4 weeks 15 hours ago) and read 2671 times:
Support Airliners.net - become a First Class Member!

Quoting Aeroluxpt (Reply 4):
They are having some competition from ryanair witch is at about 45m drive from Luxembourg.

I visited city of Luxembourg last week and we flew with Ryanair to Frankfurt Hahn. The shuttle bus took 1 hour 45 minutes one way and cost €20 one way... I would rather have flown to Lux airport had we found cheaper flights there. City of Luxembourg was nice, though, nice inexpensive hotel too  Smile



Come, fly the prevailing winds with me
User currently offlineEstablished02 From Belgium, joined Jan 2002, 536 posts, RR: 2
Reply 10, posted (8 years 6 months 4 weeks 15 hours ago) and read 2664 times:

Quoting Aeroluxpt (Reply 6):
London city is a very good route for Luxair they get a good load factor and well paid( this is the financial sector going to work).

Be aware that LG has to share the London market with at least 2 direct competitors. At present LG has 4 daily rotations to LCY and 2 rotations to LHR, VG has 3 daily rotations to LCY and BA has 2 daily rotations to LGW.

There is demand out there, but at the same time competition is fierce as well and LG is not always being the cheapest. On LUX-LCY LG is charging 684,44 EUR (all incl.) for a day return and 534,42 EUR (all incl.) for a one night stay, no matter how long you book in advance. As from 2 nights the fares can go down to 169,42 EUR (all incl.).

LG may have a good load factor on some of their London flights, however the crucial question is whether these flights can really generate enough revenue to sustain the whole London operation.

LG's ERJ135 is a beautiful and fast aircraft, however I believe it has been an expensive toy to buy in the first place and the aircraft isn't running on water either. In other words, the costs to operate this machine to LCY are expectedly quite high.


User currently offlineOrion737 From , joined Dec 1969, posts, RR:
Reply 11, posted (8 years 6 months 4 weeks 14 hours ago) and read 2654 times:

An all 737 fleet would be unsuitable for Luxair. Many regional routes are better suited to the smaller capacity of the ERJ.

Luxair is one of the few European airlines which still offers a high standard complimentary cabin service and I hope this is retained.

They do not have the low costs to be an LCC. Im osrry to here of their declining fortunes as I flew them a couple of years ago, just as many airlines were cutting back cabin service, but Luxair was excellent.

If anything, I feel the EMB170 series would be better suited to Luxair than the larger 737. The larger EMB190 could be used for the longer holiday charter IT flights and would be a better fit for many of their routes. An all Emrarer fleet would suit Luxair.


User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 12, posted (8 years 6 months 4 weeks 14 hours ago) and read 2648 times:

So in your opinion witch direction should Luxair take? Established02

User currently offlineVinnieWinnie From United States of America, joined Nov 2005, 790 posts, RR: 0
Reply 13, posted (8 years 6 months 4 weeks 14 hours ago) and read 2640 times:

Quoting Aeroluxpt (Reply 6):
they have the European parliament

The european court of justice I believe....

Based on your experience though, where do most people fly from? Frankfurt Hahn is close I believe, but what about Frankfurt Main? Are there many people driving to Brussels?

But yeah in my opinion it has the same problems as SNBA... Home market is just way to small to have an effective scale!


User currently offlinePatroni From Luxembourg, joined Aug 1999, 1403 posts, RR: 14
Reply 14, posted (8 years 6 months 4 weeks 14 hours ago) and read 2635 times:

Finally LG comes of its high horse and starts to rethink its business model, after ignoring the threat from HHN and CRL with a typical "Mir wëlle bleiwen wat mir sin" (Luxembourgish for "We want to stay what we are") approach for years!
A typical example is the absence of E-Tickets. I once heard a saying that there are only 6 airports in the world that don't offer E-Tickets, 5 are in Africa, one is LUX. Certainly exagerated, but you get the picture... Not what one would expect from a modern business-minded airline, which also has a monopoly for pax handling at the airport. Online-Checkin, Self-Checkin if you have luggage? Forget it. Rather queue up at the ticket desk, wait till a more or (mostly) less friendly agent cares to give you a paper ticket, queue again at the checkin desks. Anyway, lightyears after the competition, LG has now decided to imtroduce ETIX in LUX, yay!

I really like our national carrier and sincerely wish that it flies back into profitability. There will be some lessons to learn though. Let's hope that the LG Management has the power to turn this airline around and show the Ryanair's iaround LUX that quality is still a viable alternative!


User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 15, posted (8 years 6 months 4 weeks 14 hours ago) and read 2630 times:

Quoting VinnieWinnie (Reply 13):
The European court of justice I believe....

You are right on the European court of justice but the European Parliament also exists here. Strasbourg, Brussels, and Luxembourg it depends on where they meet.
Frankfurt Main is about twice the distance Lux-Hahn.
Yes, there are people that go to Brussels to get a plane.


User currently offlineAeroluxpt From Luxembourg, joined Feb 2006, 37 posts, RR: 0
Reply 16, posted (8 years 6 months 4 weeks 14 hours ago) and read 2627 times:

Quoting Patroni (Reply 14):
Not what one would expect from a modern business-minded airline, which also has a monopoly for pax handling at the airport

Will this monopoly last? I heard that in 2 years they have to open up.


User currently offlinePatroni From Luxembourg, joined Aug 1999, 1403 posts, RR: 14
Reply 17, posted (8 years 6 months 4 weeks 14 hours ago) and read 2617 times:

Quoting Aeroluxpt (Reply 16):
Will this monopoly last? I heard that in 2 years they have to open up.

Yes, I think with the opening of the new terminal, they will no longer have the handling monopoly - and will probably face an even more stiff headwind from the other airlines once those are no longer depending on LG while the handling revenue shrink at the same time).

In my opinion LG still has a good chance for a turnaround, provided that they don't miss the wakeup call which rings at the moment!


User currently offlineEstablished02 From Belgium, joined Jan 2002, 536 posts, RR: 2
Reply 18, posted (8 years 6 months 4 weeks 14 hours ago) and read 2612 times:

Quoting Aeroluxpt (Reply 12):
So in your opinion witch direction should Luxair take? Established02

I surely can not speak for LG's entire network. I can only comment a bit on the London situation.

LG has some valuable slots at LHR, however LG's current schedule to LHR is quite odd and does not allow a proper day return in and out of LHR. I believe LG is currently operating the 737 to LHR, even on their second (off-peak) rotation at noon time.

The competition with VG on LCY is a tough one for LG. Up until 2004 LG used to put its code on VG's flights to LCY. Then LG decided to set up their own services to LCY with the F50 and as from Spring 2005 with the ERJ135. Operating the ERJ135 on this short route pleases the customer, however it requires a consistently high seat revenue. Obviously this objective would be easier to attain in a monopoly situation.


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