FatCat
Topic Author
Posts: 958
Joined: Thu Apr 05, 2018 2:02 pm

DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 12:43 pm

- LH stocks running between -10% and -12% today
- worst performance since 04/2017
- lowering of prices, LCC competition allegedly influencing ebit margin
- EM @ 2,4 bn €, forecasted @ 2,7 bn (Credit Suisse)
- "Network Arilines" (Lufthansa, Austrian, Swiss) EM between 7% ad 9% (forecasted 7,5% - 9,5%)
- Eurowings EM between -6% and -4% (forecasted break even)

https://www.ilsole24ore.com/art/finanza ... id=ACncvqR (in italian)
https://www.finanzen.net/nachricht/akti ... 19-7612670 (in German)
https://edition.cnn.com/2019/06/17/inve ... index.html (in English)
Aeroplane flies high
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SCQ83
Posts: 5387
Joined: Wed Oct 03, 2012 8:32 pm

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:00 pm

Maybe they should close Eurowings and focus on their core market (business PAX, long-haul, connections).
 
finnishway
Posts: 562
Joined: Sat Jul 14, 2012 5:17 pm

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:03 pm

SCQ83 wrote:
Maybe they should close Eurowings and focus on their core market (business PAX, long-haul, connections).


Yup and let easyJet, Ryanair and Wizz Air expand and get their passengers?

They just annouced some time ago that this year they try to make everything that Eurowings will be profitable next year. Eurowings is definitely part of their plans against LCC competition. They will not give up.
 
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mercure1
Posts: 4464
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:07 pm

Well no surprise. Their investor update published Sunday warned of reduced earnings due softness in markets like Germany plus ongoing high cost including fuel.
mercure f-wtcc
 
SCQ83
Posts: 5387
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:12 pm

finnishway wrote:
Yup and let easyJet, Ryanair and Wizz Air expand and get their passengers?

They just annouced some time ago that this year they try to make everything that Eurowings will be profitable next year. Eurowings is definitely part of their plans against LCC competition. They will not give up.


Well, that apparently is what they had already forecasted for this year.

- Eurowings EM between -6% and -4% (forecasted break even)


On the other hand Eurowings/Germanwings has been there forever. It seems they couldn't solve their issues when the German market had little low-cost competition. I don't see how in 2019 Eurowings will stop Ryanair/Lauda, Wizz Air and easyJet growing in DACH. It seems those three carriers will keep growing and growing and driving EW out of more and more markets. See Berlin or Vienna.
 
FatCat
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:19 pm

I don't see LHG closing / dismantling / absorbing Eurowings anytime soon, yet a -4% forecast is bad and influences the whole Group
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AIRT0M
Posts: 79
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:48 pm

Boohoo. Still over 2 - 2.4bn profit, instead of projected 2.4 - 3bn. 340 million of it are due to provisions for tax arrears. The aviation industry is probably on the verge of a crisis with some difficult years ahead, but no one can seriously say LH is having a crisis (yet).
 
chonetsao
Posts: 302
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 1:56 pm

AIRT0M wrote:
Boohoo. Still over 2 - 2.4bn profit, instead of projected 2.4 - 3bn. 340 million of it are due to provisions for tax arrears. The aviation industry is probably on the verge of a crisis with some difficult years ahead, but no one can seriously say LH is having a crisis (yet).


Yes, agree with you, not yet to panic.

As fleet aging and expenditure will increase. There are many questions need to be answered. LH will be fine, but the doubters will have foundations to continue questioning its strategy. The in fight within the group due to different national interests will persist.
 
mutu
Posts: 488
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 2:04 pm

It's just their turn to see the powerful effect of the LCc growth in their domestic markets. London LCC penetration is over 50% of traffic to Europe now and stabilising as it peaks out. Spain similarly. France and Germany and the big markets where there is still big growth for LCCs.
It will sort itself out as LHG adjusts.
 
FatCat
Topic Author
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Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 2:31 pm

AIRT0M wrote:
Boohoo. Still over 2 - 2.4bn profit, instead of projected 2.4 - 3bn. 340 million of it are due to provisions for tax arrears. The aviation industry is probably on the verge of a crisis with some difficult years ahead, but no one can seriously say LH is having a crisis (yet).

A -12% loss in one day is *billions* gone in capitalization, complicated thing made simply, if you own € 1,- M LH stocks, today they are worth € 120 K less, so you've already lost a mid sized apartment.
Investors have lots of stocks - I mean lots - so in a day, they lost many many mid sized apartments
Investors don't like to loose mid sized apartments in one day, they like to earn big houses in a day with stock excange
So the fear is that the sell attitute will continue, the more stocks are sold, the more the title loose
€ 2,- BN profit is barely acceptable, if you think that this is a pre-tax balance
Aeroplane flies high
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devron
Posts: 318
Joined: Wed Apr 20, 2011 11:56 am

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 2:52 pm

This move is investors realizing a few very difficult quarters ahead. Airlines are very cyclical LH will get over this. But if eurowings will continque as they currently do doubt it. I guess costs are simple to high to compete with FR and the brand eurowings is not very good in Germany. That AF stoped level give a clear indication what to hold of these seperate airlines.
 
Andy33
Posts: 2473
Joined: Tue Sep 15, 2009 9:30 am

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 3:17 pm

[photoid][/photoid]
devron wrote:
This move is investors realizing a few very difficult quarters ahead. Airlines are very cyclical LH will get over this. But if eurowings will continque as they currently do doubt it. I guess costs are simple to high to compete with FR and the brand eurowings is not very good in Germany. That AF stoped level give a clear indication what to hold of these seperate airlines.

AF stopped Level? Don't you mean Joon? level belongs to IAG.
 
Conti764
Posts: 46
Joined: Tue Dec 11, 2007 2:09 pm

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 4:43 pm

SCQ83 wrote:
Maybe they should close Eurowings and focus on their core market (business PAX, long-haul, connections).


And down goes SN through the drain, together with EW. History repeats itself.
 
DUSZRH
Posts: 153
Joined: Thu Jan 05, 2017 12:17 am

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 5:15 pm

It’s not like the “new entrants” in the DA market are very profitable either (U2, OE, VK). If I look on the TXL-rest of Germany fares there are multiple flights per day available at 30-50€ one way. And I’m talking about this week.... Just not sustainable!
 
devron
Posts: 318
Joined: Wed Apr 20, 2011 11:56 am

Re: DAX30: LHA (Deutsche Lufthansa) plummeting, LCC competition on the rise

Mon Jun 17, 2019 7:49 pm

Andy33 wrote:
[photoid][/photoid]
devron wrote:
This move is investors realizing a few very difficult quarters ahead. Airlines are very cyclical LH will get over this. But if eurowings will continque as they currently do doubt it. I guess costs are simple to high to compete with FR and the brand eurowings is not very good in Germany. That AF stoped level give a clear indication what to hold of these seperate airlines.

AF stopped Level? Don't you mean Joon? level belongs to IAG.


Yes indeed thanks for correcting me. Level will be droped soon too is my guess.

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