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RvA
Posts: 375
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 7:33 am

Waterbomber2 wrote:
I didn't take this Thiele issue too seriously until I watched the Youtube video linked above.
Thiele seems to be opinionated and very critical of the incumbent government.
"Our government has made very significant errors in the past 10 years", mentionning the exit out of nuclear energy without an alternative plan in place causing increase in energy costs, the sanctions towards Russia for the annexation of Crimea that has decimated exports, and the immigration policy.

He seems to have started purchasing LH shares in March, he does not seem to have had a position before that.

I don't think that this is about money or profiting off the bailout.
Angela Merkel is profiling Lufthansa as Germany's champion of enterprises that needs to be saved, and Thiele might want to destroy LH just to make a political statement.

Thiele seems to have a very rightist view, so he may not agree with state aids in most forms.


Making a statement that will cost tends of thousands of people (and mostly of course Germans) their jobs is one hell of a statement. Not sure that will go down well. Get the popcorn ready!
 
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seahawk
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 7:48 am

RvA wrote:
seahawk wrote:
RvA wrote:

I think you can expect this, the question is in what shape. Germany will not be without LH, in some shape or form it will survive.


Normally yes, but not in that case imho. If Thiele is eager to force Lufthansa into insolvency and refuses state aid, the state won´t save them. And after that I can really not see the brand being brought back. Imho the state would probably take control of Condor and then build them up. There is too much political face to be lost, to give in to an investor at the moment. Once they file for insolvency, the state will imho not jump in.


What you’re saying is possible but I cannot imagine the German government would let the name Lufthansa go down as Condor won’t cut it. Maybe buy the branding and rebrand Condor?


If he really does it to proof a political point, the brand will be badly burned and the politicians will have no desire to rescue it. Condor is a closely connected branding, nearly as old and has a generally positive image. If you start with Condor or a new Lufthansa, won´t make much difference then.
 
RvA
Posts: 375
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 7:59 am

seahawk wrote:
RvA wrote:
seahawk wrote:

Normally yes, but not in that case imho. If Thiele is eager to force Lufthansa into insolvency and refuses state aid, the state won´t save them. And after that I can really not see the brand being brought back. Imho the state would probably take control of Condor and then build them up. There is too much political face to be lost, to give in to an investor at the moment. Once they file for insolvency, the state will imho not jump in.


What you’re saying is possible but I cannot imagine the German government would let the name Lufthansa go down as Condor won’t cut it. Maybe buy the branding and rebrand Condor?


If he really does it to proof a political point, the brand will be badly burned and the politicians will have no desire to rescue it. Condor is a closely connected branding, nearly as old and has a generally positive image. If you start with Condor or a new Lufthansa, won´t make much difference then.


How badly burnt can it be? Lufthansa is a worldwide recognised brand whereas Condor isn’t. A bankruptcy won’t change that the brand name is strong and associated with Germany no matter where in the world you are.
Let’s see what happens. I’m sure KLM, BA and AF are very keen to see what happens. KLM is already very good at connecting German cities to the US via AMS so I imagine they will be watching very closely.
I feel though for the tens of thousands who may be affected here By an old man throwing a tantrum.
 
Noshow
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 8:26 am

Lufthansa unions obviously pissed off a lot of the stockholders over many years of threats and strikes. So now they see this as the perfect time for some reorganization. It is far from Mr. Thiele alone "throwing a tantrum". It's more like calculated risk. We will see this tomorrow. However once things start to move they might be hard to stop.
 
Blerg
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 8:42 am

What I don't understand is why is Carsten Spohr still the CEO? To me it seems that he has led LH Group into this chaotic situation they are in today. Maybe it's time for someone else to take over.
 
RvA
Posts: 375
Joined: Tue Sep 15, 2015 12:37 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 9:01 am

Blerg wrote:
What I don't understand is why is Carsten Spohr still the CEO? To me it seems that he has led LH Group into this chaotic situation they are in today. Maybe it's time for someone else to take over.


I actually don’t agree with that. Change is hard in Germany and from what I have seen from the outside it seems they have slowly but steadily been consolidating where possible and had good ideas for the coming few years to make this much more efficient.
Based on what I have witnessed in a former company I worked in that tried to restructure its Germany based operations the labour laws and conditions there don’t help to make this easy.
 
RvA
Posts: 375
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 9:02 am

Noshow wrote:
Lufthansa unions obviously pissed off a lot of the stockholders over many years of threats and strikes. So now they see this as the perfect time for some reorganization. It is far from Mr. Thiele alone "throwing a tantrum". It's more like calculated risk. We will see this tomorrow. However once things start to move they might be hard to stop.


This is assuming he actually has an interest in saving the group and doing a better job himself than what is or would otherwise be done. So far his interest is anyone’s guess I think but there are a lot of lives being played with here.
 
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seahawk
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 10:51 am

RvA wrote:
seahawk wrote:
RvA wrote:

What you’re saying is possible but I cannot imagine the German government would let the name Lufthansa go down as Condor won’t cut it. Maybe buy the branding and rebrand Condor?


If he really does it to proof a political point, the brand will be badly burned and the politicians will have no desire to rescue it. Condor is a closely connected branding, nearly as old and has a generally positive image. If you start with Condor or a new Lufthansa, won´t make much difference then.


How badly burnt can it be? Lufthansa is a worldwide recognised brand whereas Condor isn’t. A bankruptcy won’t change that the brand name is strong and associated with Germany no matter where in the world you are..


If Lufthansa goes into insolvency and lays off all employees to make money for one billionaire the brand would be deader than dead in Germany.
 
787X30
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 11:12 am

Waterbomber2 wrote:
... might want to destroy LH just to make a political statement.

... seems to have a very rightist view, ...

Yes.
 
fraT
Posts: 1174
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 11:15 am

Blerg wrote:
What I don't understand is why is Carsten Spohr still the CEO? To me it seems that he has led LH Group into this chaotic situation they are in today. Maybe it's time for someone else to take over.


Is Spohr responsible for the Corona Virus or why are you suggesting he has responsibility?
The last three years were the best in LH history. And that was achieved although there were some strikes. So yes, he has responsibility in playing hard-ball with some unions (at least the FA union however is fighting within itself), but the the results proved him right. I would think that most LH folks prefer him a lot over his predecessor Mr. Franz.

Basically every airline needs state aid. Only exceptions to a certain amount are the ones like Ryanair but that would lead to a different topic on how they make their money, on the backs of their (ex)employees.
 
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par13del
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 11:25 am

So are the tax payers on board with this bail out?
 
Blerg
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 11:28 am

fraT wrote:
Blerg wrote:
What I don't understand is why is Carsten Spohr still the CEO? To me it seems that he has led LH Group into this chaotic situation they are in today. Maybe it's time for someone else to take over.


Is Spohr responsible for the Corona Virus or why are you suggesting he has responsibility?
The last three years were the best in LH history. And that was achieved although there were some strikes. So yes, he has responsibility in playing hard-ball with some unions (at least the FA union however is fighting within itself), but the the results proved him right. I would think that most LH folks prefer him a lot over his predecessor Mr. Franz.

Basically every airline needs state aid. Only exceptions to a certain amount are the ones like Ryanair but that would lead to a different topic on how they make their money, on the backs of their (ex)employees.


Corona has basically unveiled many things which went wrong in the LH Group. When the times were good many things could be overlooked. However now we are seeing what a mass their whole structure is and how much extra fat there is. Germanwings is already gone and so is Sunexpress. Eurowings keeps on being a bottomless mess whose future remains uncertain. LH Group was in charge of SN and OS, two airlines that struggled to find their place in European aviation landscape.
 
YangFeng
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 12:14 pm

par13del wrote:
So are the tax payers on board with this bail out?


They don't need to be.
 
YIMBY
Posts: 724
Joined: Tue Sep 20, 2016 4:32 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 1:26 pm

seahawk wrote:
RvA wrote:
seahawk wrote:

If he really does it to proof a political point, the brand will be badly burned and the politicians will have no desire to rescue it. Condor is a closely connected branding, nearly as old and has a generally positive image. If you start with Condor or a new Lufthansa, won´t make much difference then.


How badly burnt can it be? Lufthansa is a worldwide recognised brand whereas Condor isn’t. A bankruptcy won’t change that the brand name is strong and associated with Germany no matter where in the world you are..


If Lufthansa goes into insolvency and lays off all employees to make money for one billionaire the brand would be deader than dead in Germany.


It may be negative for a while, but people will remember the long and glorious history. Foreigners may never have heard about the bankruptcy.

Is there any rule that forbids selling and reusing the brand? Otherwise It is an asset that could bring some money in the liquidation. There may be airlines that need to be rebranded and using an internationally recognized name might be better than an artificial name. Vueling/Level, Transavia, S7, Virqin, Air [*], [*:ish] Airlines, *air [* referring to any more or less developed country]???

Though historically the defunct names have not been recirculated (where are Swissair, Sabena, ...) though someone owns the brands and if not, it is free for anyone to be taken.
 
RvA
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 5:28 pm

If google translate is right, then he will vote for and the package will go through

https://www.faz.net/aktuell/wirtschaft/ ... 59&GEPC=s9
 
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Terrier79
Posts: 75
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 5:30 pm

RvA wrote:
If google translate is right, then he will vote for and the package will go through

https://www.faz.net/aktuell/wirtschaft/ ... 59&GEPC=s9

He will vote in favor of the bailout, and he says that he is going to take influence in the future and not just watch.
 
Dieuwer
Posts: 2412
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 6:04 pm

Wall Street seems elated about the prospect of LH. Stock up 9%! (Ticker symbol: DLAKY).
 
FSDan
Posts: 3275
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 6:32 pm

Dieuwer wrote:
Wall Street seems elated about the prospect of LH. Stock up 9%! (Ticker symbol: DLAKY).


"Relieved" might be a better word. A deep exhale after a protracted holding of breath... Although I suppose we should wait until tomorrow to count our chickens.
This is my signature until I think of a better one.
 
fraT
Posts: 1174
Joined: Wed Oct 01, 2003 4:32 am

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 7:30 pm

Blerg wrote:
fraT wrote:
Blerg wrote:
What I don't understand is why is Carsten Spohr still the CEO? To me it seems that he has led LH Group into this chaotic situation they are in today. Maybe it's time for someone else to take over.


Is Spohr responsible for the Corona Virus or why are you suggesting he has responsibility?
The last three years were the best in LH history. And that was achieved although there were some strikes. So yes, he has responsibility in playing hard-ball with some unions (at least the FA union however is fighting within itself), but the the results proved him right. I would think that most LH folks prefer him a lot over his predecessor Mr. Franz.

Basically every airline needs state aid. Only exceptions to a certain amount are the ones like Ryanair but that would lead to a different topic on how they make their money, on the backs of their (ex)employees.


Corona has basically unveiled many things which went wrong in the LH Group. When the times were good many things could be overlooked. However now we are seeing what a mass their whole structure is and how much extra fat there is. Germanwings is already gone and so is Sunexpress. Eurowings keeps on being a bottomless mess whose future remains uncertain. LH Group was in charge of SN and OS, two airlines that struggled to find their place in European aviation landscape.


It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.
 
Blerg
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 8:26 pm

fraT wrote:
Blerg wrote:
fraT wrote:

Is Spohr responsible for the Corona Virus or why are you suggesting he has responsibility?
The last three years were the best in LH history. And that was achieved although there were some strikes. So yes, he has responsibility in playing hard-ball with some unions (at least the FA union however is fighting within itself), but the the results proved him right. I would think that most LH folks prefer him a lot over his predecessor Mr. Franz.

Basically every airline needs state aid. Only exceptions to a certain amount are the ones like Ryanair but that would lead to a different topic on how they make their money, on the backs of their (ex)employees.


Corona has basically unveiled many things which went wrong in the LH Group. When the times were good many things could be overlooked. However now we are seeing what a mass their whole structure is and how much extra fat there is. Germanwings is already gone and so is Sunexpress. Eurowings keeps on being a bottomless mess whose future remains uncertain. LH Group was in charge of SN and OS, two airlines that struggled to find their place in European aviation landscape.


It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.


EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.
 
fraT
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 8:55 pm

Blerg wrote:
fraT wrote:
Blerg wrote:

Corona has basically unveiled many things which went wrong in the LH Group. When the times were good many things could be overlooked. However now we are seeing what a mass their whole structure is and how much extra fat there is. Germanwings is already gone and so is Sunexpress. Eurowings keeps on being a bottomless mess whose future remains uncertain. LH Group was in charge of SN and OS, two airlines that struggled to find their place in European aviation landscape.


It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.


EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.


It was not really a secret that the airlines you mentioned made losses or were around break-even so your "hidden" claim is only valid for people who did not really pay attention.
 
Blerg
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Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 9:19 pm

fraT wrote:
Blerg wrote:
fraT wrote:

It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.


EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.


It was not really a secret that the airlines you mentioned made losses or were around break-even so your "hidden" claim is only valid for people who did not really pay attention.


Thank God you were paying attention, so all is well. And by hidden I meant away from the public's attention, they were pushed under the carpet because LH Group could afford to do so, to ignore the elephant in the room.
 
stylo777
Posts: 2808
Joined: Mon Feb 13, 2006 7:32 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Wed Jun 24, 2020 9:30 pm

Blerg wrote:
fraT wrote:
Blerg wrote:

Corona has basically unveiled many things which went wrong in the LH Group. When the times were good many things could be overlooked. However now we are seeing what a mass their whole structure is and how much extra fat there is. Germanwings is already gone and so is Sunexpress. Eurowings keeps on being a bottomless mess whose future remains uncertain. LH Group was in charge of SN and OS, two airlines that struggled to find their place in European aviation landscape.


It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.


EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.

well, you are right that these entities struggled before corona; however, you also have to see the context and put it into reference with figures.
OS: in 2019 they were able to offer more flights, increase passenger figures and also sell the ASK compared to 2018. their revenues were less, primarily driven by the blood-bath of VIE after AB collapse and the massive amount of LCC capacity in the market. despite all those challenges, they did well and realized early enough that costs have to go down even further thus the implementation of cost-cutting programs and new strategy (that was by the end of 2019).
SN: at first, it doesn't really help to be squeezed in between two megahubs (CDG and AMS) with convenient train connections as well as the fact to have FR around the corner at CRL. also mid-2019 it was decided to delink SN from EW and moving it closer to the network airlines such as LH, LX and OS with a EBIT target of 8%. Operating expenses came down quite siginificantly, but Corona messed up the whole strategy. Now it's up to the management to reduce the SN fleet by 30% and workforce by 25% in order to develop a rightsized airline for BRU with the focus on key markets.

Both OS and SN are benefiting from synergies, which on one side brings down costs, but on the other also widens the horizont in terms of oportunities, flexibility and market presence.

Also, a factual correction to your post: it is Sunexpress Germany (XG) which will be liquidated, not the entire airline (XQ).
 
mxaxai
Posts: 1809
Joined: Sat Jun 18, 2016 7:29 am

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 12:28 am

Lufthansa and the German flight attendant union UFO have just now agreed on a package for the FA's (of LH proper):
- reductions worth 500 million € "during the crisis" (some reports say that all measures will be in effect for 4 years)
- compulsory: no pay increases, reduced flying hours, reduced pension payments
- voluntary: unpaid leave, premature retirement
- in return: no layoffs until 2023
https://newsroom.lufthansagroup.com/ger ... 01331b5964 [German]
 
Blerg
Posts: 3979
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 3:55 am

stylo777 wrote:
Blerg wrote:
fraT wrote:

It's easy to say that in such an unrepresented crisis. Have you posted about the "extra fat" in the recent years when they made 2 to 3 billion net profit?
Of course you can debate about OS, SN or Eurowings since they did not perform as good as LH and LX. However those are strategic investments and Austria and Belgium are not the smallest markets in Europe.

But I am sure you can give me some examples of airlines/airline groups which did a better job in the decade before Covid.


EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.

well, you are right that these entities struggled before corona; however, you also have to see the context and put it into reference with figures.
OS: in 2019 they were able to offer more flights, increase passenger figures and also sell the ASK compared to 2018. their revenues were less, primarily driven by the blood-bath of VIE after AB collapse and the massive amount of LCC capacity in the market. despite all those challenges, they did well and realized early enough that costs have to go down even further thus the implementation of cost-cutting programs and new strategy (that was by the end of 2019).
SN: at first, it doesn't really help to be squeezed in between two megahubs (CDG and AMS) with convenient train connections as well as the fact to have FR around the corner at CRL. also mid-2019 it was decided to delink SN from EW and moving it closer to the network airlines such as LH, LX and OS with a EBIT target of 8%. Operating expenses came down quite siginificantly, but Corona messed up the whole strategy. Now it's up to the management to reduce the SN fleet by 30% and workforce by 25% in order to develop a rightsized airline for BRU with the focus on key markets.

Both OS and SN are benefiting from synergies, which on one side brings down costs, but on the other also widens the horizont in terms of oportunities, flexibility and market presence.

Also, a factual correction to your post: it is Sunexpress Germany (XG) which will be liquidated, not the entire airline (XQ).


Last year, SN Brussels had an EBIT loss of €25.9 million, while this loss grew to €40 million once taxes and interest rates were added. That's quite a sum for an airline their size. Maybe it's about time Belgians realized that their home country just can't sustain a profitable national carrier anymore. There is a reason why LH Group wanted to replace them with EW, they probably saw how hopeless it was running a separate airline in a market with such characteristics.

As for Austrian Airlines, point is that those LCCs that moved in are not going anywhere. Their loss in Q1 increased from €73 million to €99 million. I know very well that the Q1 is the weakest and slowest period of the year but these numbers are a good indicator of what's to come. Yes, LCCs have eroded their yields which is a shame since they can no longer charge you €500 for an hour flight to Venice or Frankfurt, but they will have to find a way to coexist with them otherwise losses will keep on being accumulated long-term.
 
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seahawk
Posts: 9627
Joined: Fri May 27, 2005 1:29 am

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 5:08 am

Blerg wrote:
stylo777 wrote:
Blerg wrote:

EW, SN and OS struggled even before corona and they were kept on life support because other branches of the group made enough money. Corona has merely uncovered many things that were hidden until recently.

well, you are right that these entities struggled before corona; however, you also have to see the context and put it into reference with figures.
OS: in 2019 they were able to offer more flights, increase passenger figures and also sell the ASK compared to 2018. their revenues were less, primarily driven by the blood-bath of VIE after AB collapse and the massive amount of LCC capacity in the market. despite all those challenges, they did well and realized early enough that costs have to go down even further thus the implementation of cost-cutting programs and new strategy (that was by the end of 2019).
SN: at first, it doesn't really help to be squeezed in between two megahubs (CDG and AMS) with convenient train connections as well as the fact to have FR around the corner at CRL. also mid-2019 it was decided to delink SN from EW and moving it closer to the network airlines such as LH, LX and OS with a EBIT target of 8%. Operating expenses came down quite siginificantly, but Corona messed up the whole strategy. Now it's up to the management to reduce the SN fleet by 30% and workforce by 25% in order to develop a rightsized airline for BRU with the focus on key markets.

Both OS and SN are benefiting from synergies, which on one side brings down costs, but on the other also widens the horizont in terms of oportunities, flexibility and market presence.

Also, a factual correction to your post: it is Sunexpress Germany (XG) which will be liquidated, not the entire airline (XQ).


the sad thing is that LH first used money mostly made by Swiss to keep dead airlines like SN, EW and OS alive. now they even get government money to keep doing it, while the succesfull competition gets less help and does not get access to the slots for the airports. FR, U" and Wizz must take this to court.

Last year, SN Brussels had an EBIT loss of €25.9 million, while this loss grew to €40 million once taxes and interest rates were added. That's quite a sum for an airline their size. Maybe it's about time Belgians realized that their home country just can't sustain a profitable national carrier anymore. There is a reason why LH Group wanted to replace them with EW, they probably saw how hopeless it was running a separate airline in a market with such characteristics.

As for Austrian Airlines, point is that those LCCs that moved in are not going anywhere. Their loss in Q1 increased from €73 million to €99 million. I know very well that the Q1 is the weakest and slowest period of the year but these numbers are a good indicator of what's to come. Yes, LCCs have eroded their yields which is a shame since they can no longer charge you €500 for an hour flight to Venice or Frankfurt, but they will have to find a way to coexist with them otherwise losses will keep on being accumulated long-term.
 
Waterbomber2
Posts: 1208
Joined: Mon Feb 04, 2019 3:44 am

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 6:04 am

mxaxai wrote:
Lufthansa and the German flight attendant union UFO have just now agreed on a package for the FA's (of LH proper):
- reductions worth 500 million € "during the crisis" (some reports say that all measures will be in effect for 4 years)
- compulsory: no pay increases, reduced flying hours, reduced pension payments
- voluntary: unpaid leave, premature retirement
- in return: no layoffs until 2023
https://newsroom.lufthansagroup.com/ger ... 01331b5964 [German]


I wonder though, have workers voted on this or did the unions "decide for them".
Any major changes to contract terms should be put to a vote.
 
Blerg
Posts: 3979
Joined: Tue Jan 09, 2018 11:42 am

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 7:52 am

Anyone know when the vote is today?
 
Noshow
Posts: 1514
Joined: Wed Jun 15, 2016 3:20 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 7:57 am

Noontime local time. Early afternoon. At this moment in two hours.
 
stylo777
Posts: 2808
Joined: Mon Feb 13, 2006 7:32 pm

Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 10:06 am

 
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SQ22
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Posts: 1856
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Re: Lufthansa Group: 10B EUR bailout - Update

Thu Jun 25, 2020 4:39 pm

Reuters in Germany is reporting that 98,04 % have voted for the rescue package.

Link in German:

Lufthansa-Aktionäre stimmen für staatliches Rettungspaket
 
davidjohnson6
Posts: 804
Joined: Mon Jun 20, 2016 10:10 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 4:44 pm

So turkeys tend not to vote for Xmas...
 
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SQ22
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Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 4:54 pm

Here is a english link also mentioned that they came to an agreement with cabin crew union UFO a few hours before the deal.

Lufthansa shareholders approve German rescue package
 
GLANKG
Posts: 102
Joined: Fri Feb 02, 2018 9:19 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 5:14 pm

So the vast majority voted for the package in the end. I wonder if all those speculations were exaggerated rumours or Thiele seehofert in the eleventh hour.
 
mxaxai
Posts: 1809
Joined: Sat Jun 18, 2016 7:29 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 5:45 pm

SQ22 wrote:
Here is a english link also mentioned that they came to an agreement with cabin crew union UFO a few hours before the deal.

Lufthansa shareholders approve German rescue package


Lufthansa press release regarding the shareholder vote
The package provides for stabilization measures and loans of up to 9 billion euros. The economy stabilisation funds [WSF] will make silent capital contributions of up to 5.7 billion euros to the assets of Deutsche Lufthansa AG. It will also establish a 20 percent stake in the share capital of Deutsche Lufthansa AG by way of a capital increase. This capital increase was approved at today’s Extraordinary General Meeting.

The shareholders also voted in favor of granting two conversion rights for parts of the silent capital contributions. These conversion rights are intended, on the one hand, to safeguard the Federal Government in case of a takeover of Lufthansa and, on the other hand, to secure the interest payments for the silent capital contribution. Both conversion rights can be transformed into a further five percent of the company’s share capital should these conditions be met.

The package will be supplemented by a loan of up to 3 billion euros with the participation of KfW and private banks.

Lufthansa press release regarding the flight attendant deal
With the crisis package that has now been agreed upon, the company will be able to avoid layoffs for the 22,000 cabin staff of Deutsche Lufthansa AG during the crisis. The agreements reached still require the approval of the UFO [FA union] members.
 
Waterbomber2
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Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 8:13 pm

Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.
 
RvA
Posts: 375
Joined: Tue Sep 15, 2015 12:37 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 8:39 pm

Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.


Let’s take note and go back to your prediction. I think if everything starts to recover without a big set back they should be fine. Time will tell!
 
oldJoe
Posts: 178
Joined: Fri Jan 10, 2020 11:04 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 9:15 pm

Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.


Wishful thinking in full swing !
If Germany will be brought to its knees, all small countries in Europe will be the bigger losers include their fancy LCC`s
 
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JLGordon
Posts: 6
Joined: Thu May 21, 2020 8:14 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Thu Jun 25, 2020 9:59 pm

I thought the deal would not happen, but it did. And it is just great for over 100.000 people still having a job after Friday.
And with some "bold" predictions: Go on looking in glass balls, but never forget that there are always a lot of people, a lot of families, that rely on their jobs. Everywhere. PLease wish people good times, and never predict families loosing their homes.
I´m making all possible fingers crossed, that the US will be able to go through this with not such a hard hit on all the people living and working there.
 
stylo777
Posts: 2808
Joined: Mon Feb 13, 2006 7:32 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 12:13 am

Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.

how to you back your bold statement and predictions about lack of liquidity?
 
Waterbomber2
Posts: 1208
Joined: Mon Feb 04, 2019 3:44 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 7:23 am

stylo777 wrote:
Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.

how to you back your bold statement and predictions about lack of liquidity?


It's not bold, it's actually conservative.

Cash in February 2020: 4+ billion EUR.

Cash in July 2020:
A. without state aid: 0 EUR > > cash burn 1 billion per month with fleet grounded
B. with state aid: 9 billion EUR

Cash in December 2020:
A. With entire fleet grounded : 9 billion - 6 months x 1 billion = 3 billion > > help we need more money!
B. With part of the fleet flying : 9 billion - 6 months x 1,5 billion = 0 EUR >> help, we're out of money!

Cash in March 2020:
A. With fleet grounded : 9 billion - 9 months x 1 billion = 0 EUR > > help we're out of money!
B. With part of the fleet flying: 9 billion - 9 months x 1,5 billion = -4.5 Billion EUR >> Bankrupt or nationalised. In normal circumstances, nationalized, but with governments forced to choose between safeguarding themselves and corporations, airlines take the backseat. Hence bankruptcy.
 
RvA
Posts: 375
Joined: Tue Sep 15, 2015 12:37 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 7:36 am

Waterbomber2 wrote:
stylo777 wrote:
Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.

how to you back your bold statement and predictions about lack of liquidity?


It's not bold, it's actually conservative.

Cash in February 2020: 4+ billion EUR.

Cash in July 2020:
A. without state aid: 0 EUR > > cash burn 1 billion per month with fleet grounded
B. with state aid: 9 billion EUR

Cash in December 2020:
A. With entire fleet grounded : 9 billion - 6 months x 1 billion = 3 billion > > help we need more money!
B. With part of the fleet flying : 9 billion - 6 months x 1,5 billion = 0 EUR >> help, we're out of money!

Cash in March 2020:
A. With fleet grounded : 9 billion - 9 months x 1 billion = 0 EUR > > help we're out of money!
B. With part of the fleet flying: 9 billion - 9 months x 1,5 billion = -4.5 Billion EUR >> Bankrupt or nationalised. In normal circumstances, nationalized, but with governments forced to choose between safeguarding themselves and corporations, airlines take the backseat. Hence bankruptcy.


Do you have somewhere where I can see those numbers published? In particular the cash available right now the numbers in the calculations? I’m keen to understand them better. Thanks
 
Kikko19
Posts: 679
Joined: Sat Apr 22, 2017 4:45 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 7:44 am

RvA wrote:
Waterbomber2 wrote:
stylo777 wrote:
how to you back your bold statement and predictions about lack of liquidity?


It's not bold, it's actually conservative.

Cash in February 2020: 4+ billion EUR.

Cash in July 2020:
A. without state aid: 0 EUR > > cash burn 1 billion per month with fleet grounded
B. with state aid: 9 billion EUR

Cash in December 2020:
A. With entire fleet grounded : 9 billion - 6 months x 1 billion = 3 billion > > help we need more money!
B. With part of the fleet flying : 9 billion - 6 months x 1,5 billion = 0 EUR >> help, we're out of money!

Cash in March 2020:
A. With fleet grounded : 9 billion - 9 months x 1 billion = 0 EUR > > help we're out of money!
B. With part of the fleet flying: 9 billion - 9 months x 1,5 billion = -4.5 Billion EUR >> Bankrupt or nationalised. In normal circumstances, nationalized, but with governments forced to choose between safeguarding themselves and corporations, airlines take the backseat. Hence bankruptcy.


Do you have somewhere where I can see those numbers published? In particular the cash available right now the numbers in the calculations? I’m keen to understand them better. Thanks


I think German economy will suffer from covid, especially from export perspective, but the overall situation will be better than in many other countries. if Europe will be wise to fend the second wave, it will come out stronger than many other regions ripped by covid. Namely Africa, Asia (except china-South korea, TW and Japan) Americas (maybe Canada and Cuba will be spared since have functioning health systems), the winners are not who doesn't have losses, but the ones with less losses in this kind of crisis.
In aviation will be the same, the big guys will weather the situation better than less organized ones.
 
a350lover
Posts: 865
Joined: Sun Dec 24, 2017 11:21 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 8:01 am

What could be the workforce adjustments needed to drive costs down at LH despite this cash injection?
 
Flying-Tiger
Posts: 4040
Joined: Mon Aug 23, 1999 5:35 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 8:39 am

Waterbomber2 wrote:
It's not bold, it's actually conservative.


It is nonsense, and not much else. You assume costs to stay level whilst at the same time a no-income scenario in your calculation. Which is a ridiculous assumption.

Cost are being cut drastically in all quarters, whilst revenue is coming in again. It´s certainly not level (I doubt it is at any airline currently), but at least they should be far away from where they were standing in mid-March (~ 1 million EUR / hour).

And even if one assumes they are still losing 1 million EUR: 365 * 24 hours = 8,760 hours * 1 Million EUR = 8.76 bn EUR. Means that they have sufficient capital at hands for about one year.

Stop floating figures which have no connection to reality, please.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
Flying-Tiger
Posts: 4040
Joined: Mon Aug 23, 1999 5:35 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 8:45 am

a350lover wrote:
What could be the workforce adjustments needed to drive costs down at LH despite this cash injection?


Simply starting with not filling vacancies if not absolutely needed. Lufthansa has around 138,000 employees, if you assume 2.5% retirement and another 2.5% fluctuation you´re looking at around 6,000-7,000 people leaving the company each year for either retirement or other reasons. That is already quite a chunck of money which can be saved without a need by the company to pay anything. Plus they are certainly looking at releasing employees in their probation period, will not renew time-limited contracts etc.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
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seahawk
Posts: 9627
Joined: Fri May 27, 2005 1:29 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 8:56 am

Flying-Tiger wrote:
Waterbomber2 wrote:
It's not bold, it's actually conservative.


It is nonsense, and not much else. You assume costs to stay level whilst at the same time a no-income scenario in your calculation. Which is a ridiculous assumption.

Cost are being cut drastically in all quarters, whilst revenue is coming in again. It´s certainly not level (I doubt it is at any airline currently), but at least they should be far away from where they were standing in mid-March (~ 1 million EUR / hour).

And even if one assumes they are still losing 1 million EUR: 365 * 24 hours = 8,760 hours * 1 Million EUR = 8.76 bn EUR. Means that they have sufficient capital at hands for about one year.

Stop floating figures which have no connection to reality, please.


Revenue depends on the virus and nobody can tell how that goes.

If the second wave hits in August and there is no vaccine found, the negative scenario could play out.
If there is a working vaccine in fall, a more positive scenario could play out.
 
FluidFlow
Posts: 672
Joined: Wed Apr 10, 2019 6:39 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 8:57 am

Waterbomber2 wrote:
stylo777 wrote:
Waterbomber2 wrote:
Great news for Lufthansa and its workers.
Thiele is your hero.

Anyone want to bet that they're going to be asking more money by Christmas time?

Germany will be brought to its knees. Heavily industrialised countries have more to lose in this crisis.

I predict that LH will be bankrupt by next spring, through lack of liquidity but also cumulated losses.
Germany won't be able to save it then.

how to you back your bold statement and predictions about lack of liquidity?


It's not bold, it's actually conservative.

Cash in February 2020: 4+ billion EUR.

Cash in July 2020:
A. without state aid: 0 EUR > > cash burn 1 billion per month with fleet grounded
B. with state aid: 9 billion EUR

Cash in December 2020:
A. With entire fleet grounded : 9 billion - 6 months x 1 billion = 3 billion > > help we need more money!
B. With part of the fleet flying : 9 billion - 6 months x 1,5 billion = 0 EUR >> help, we're out of money!

Cash in March 2020:
A. With fleet grounded : 9 billion - 9 months x 1 billion = 0 EUR > > help we're out of money!
B. With part of the fleet flying: 9 billion - 9 months x 1,5 billion = -4.5 Billion EUR >> Bankrupt or nationalised. In normal circumstances, nationalized, but with governments forced to choose between safeguarding themselves and corporations, airlines take the backseat. Hence bankruptcy.


Look, you can rant as much as you want but Germany is absolutely fine and has enough money, and can also take on a lot of debt if needed. Heck they have not made any more debt since a while due to policy (Schwarze 0).

For example Germany saved more money for infrastructure than they could spend: https://www.ft.com/content/a8e535e0-e837-11e9-a240-3b065ef5fc55

The German state has all the necessary means to tackle a recession with big spending and on top of that Germans and their companies have a high productivity and a thrive to work. All that will happen is that 3 years down the road Germany will be even more dominant in Europe, especially as the UK takes the road in the other direction and France often is its worst enemy. Germany will thrive and Lufthansa will be save.
 
Opus99
Posts: 827
Joined: Thu May 30, 2019 10:51 pm

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 9:12 am

https://www.aerotelegraph.com/en/boeing ... ing-orders

Just as a side note. LH won’t be cancelling any orders. I’m not surprised there, this capital injection has secured their future. It’s nice to see them have some stability after a rough couple of months.
 
Flying-Tiger
Posts: 4040
Joined: Mon Aug 23, 1999 5:35 am

Re: Updated: Majority of LH Shareholders are Voting for Rescue Package

Fri Jun 26, 2020 9:49 am

Opus99 wrote:
https://www.aerotelegraph.com/en/boeing-airbus-lufthansa-wont-cancel-existing-orders

Just as a side note. LH won’t be cancelling any orders. I’m not surprised there, this capital injection has secured their future. It’s nice to see them have some stability after a rough couple of months.


And it will certainly come as a relief to Airbus and Boeing as this confirms part of their order books and thus supply chains. That´s certainly one of the indirect side effects of keeping large airlines intact, as the trickle-down effects are clearly visible.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
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