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Noshow
Posts: 2183
Joined: Wed Jun 15, 2016 3:20 pm

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

Wed Oct 21, 2020 12:30 pm

A LOT of business travel would happen if people were permitted to cross borders now. I am not blaming governments for the current rules but as fast as these restrictions can be lifted, traffic will come back. Will it be less? Very likely.
 
mxaxai
Posts: 2490
Joined: Sat Jun 18, 2016 7:29 am

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

Wed Oct 21, 2020 2:14 pm

RvA wrote:
The daughter companies first round of loans are apparently not depleted, not even close supposedly.

There's speculation that LX may need more money: https://www.tagesanzeiger.ch/swiss-brau ... 0924726902 [German, paywall but free trial available]
Swiss will soon need new state aid
Hopes of a rapid recovery have been shattered. At Swiss, it is expected that another financial injection will be necessary at the end of the year.

According to Swiss, it burns 1.5 million francs a day. Extrapolated to one year, this is more than 500 million francs.

At Swiss, they present themselves in a relaxed manner. The 1.5 billion credit of a bank consortium for Swiss and Edelweiss, 85 percent of which is secured by the federal government, is sufficient for the "coming crisis years," emphasizes spokeswoman Karin Müller. The first tranche was "drawn this month". The company is not making any statements about the amount. But behind the scenes, Swiss management circles say that the money could "run out if the situation with quarantine and travel restrictions continues long after the turn of the year".

In Berlin, a CDU member of parliament confirmed that the Lufthansa management had "explained the intensified negative development in informal meetings".

A high-ranking member of the Swiss Federal Administration with access to the Federal Council who is involved in the matter says that "... It is clear that the Swiss government cannot refuse a request for a second aid loan after it has already taken on a guarantee of 1.275 billion Swiss francs."


The article contains a ton of conjecture, rumors and hype. It calculates correctly that LX is losing CHF 500 million per year, so the loan they've secured should be enough to carry them through 2021 no matter what. I believe it's premature to say that all subsidiaries are safe, though, and they'll definitely have to shrink.
 
RvA
Posts: 478
Joined: Tue Sep 15, 2015 12:37 pm

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

Wed Oct 21, 2020 5:00 pm

mxaxai wrote:
RvA wrote:
The daughter companies first round of loans are apparently not depleted, not even close supposedly.

There's speculation that LX may need more money: https://www.tagesanzeiger.ch/swiss-brau ... 0924726902 [German, paywall but free trial available]
Swiss will soon need new state aid
Hopes of a rapid recovery have been shattered. At Swiss, it is expected that another financial injection will be necessary at the end of the year.

According to Swiss, it burns 1.5 million francs a day. Extrapolated to one year, this is more than 500 million francs.

At Swiss, they present themselves in a relaxed manner. The 1.5 billion credit of a bank consortium for Swiss and Edelweiss, 85 percent of which is secured by the federal government, is sufficient for the "coming crisis years," emphasizes spokeswoman Karin Müller. The first tranche was "drawn this month". The company is not making any statements about the amount. But behind the scenes, Swiss management circles say that the money could "run out if the situation with quarantine and travel restrictions continues long after the turn of the year".

In Berlin, a CDU member of parliament confirmed that the Lufthansa management had "explained the intensified negative development in informal meetings".

A high-ranking member of the Swiss Federal Administration with access to the Federal Council who is involved in the matter says that "... It is clear that the Swiss government cannot refuse a request for a second aid loan after it has already taken on a guarantee of 1.275 billion Swiss francs."


The article contains a ton of conjecture, rumors and hype. It calculates correctly that LX is losing CHF 500 million per year, so the loan they've secured should be enough to carry them through 2021 no matter what. I believe it's premature to say that all subsidiaries are safe, though, and they'll definitely have to shrink.


So they have enough of the loan left then if they had 1.5 at disposal and spend 0.5 a year?
 
Flying-Tiger
Posts: 4090
Joined: Mon Aug 23, 1999 5:35 am

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

Thu Oct 22, 2020 9:47 am

Probably worth to put things into perspective: IAG has just posted figures:

Operating Loss in Q3/2020 = 1.3 bn EUR
Remaining liquidity all in told = 9.3 bn EUR

Capacity down for winter to no more than 30%.

All in all: pretty much on par with the Lufthansa group on all accounts - level of loss, remaining liquidity, capacity planned.

Guess AF/KL won´t post much different figures.
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.
 
mchei
Posts: 202
Joined: Thu Jan 04, 2018 1:20 pm

Re: What is happening to Lufthansa?

Thu Oct 22, 2020 10:15 am

tommy1808 wrote:
max999 wrote:
DL and UA, before the pandemic, had profit making domestic operations.


their competition is other airlines aside of few routes. Lufthansa has Rail and Car as competition, putting a fairly hard ceiling on domestic prices.

best regards
Thomas


That’s absolutely true. However, on the typical business routes, prices can get very high, especially if you book on a short notice. That’s why I wonder why LH doesn’t make money on the short-haul business. In addition to that, LH is pretty clever with its planes. In case they can't get the 321 full on the route at a certain time, they swap to a 320 or even 319. I’ve barely seen them flying around empty cabins - with EW being an exception...

My company has paid considerably more for intra-European flights than for flights to PHL in Y+, for example.

None of this is statistically relevant of course as it is only what I experienced during the last years.
F70-F100-E145-E170-E190-319-320-321-735–736-737-738-752-763–742-744-333-343-ATR72-Metroliner-Saab2000-Lockheed Electra-C172-C182-C182RG-MD11
 
tommy1808
Posts: 14404
Joined: Thu Nov 21, 2013 3:24 pm

Re: What is happening to Lufthansa?

Thu Oct 22, 2020 10:19 am

mchei wrote:
My company has paid considerably more for intra-European flights than for flights to PHL in Y+, for example. .


:checkmark:
my most expensive flight FMO-MUC cost my boss more than my least expensive flight to TPE.....

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
mxaxai
Posts: 2490
Joined: Sat Jun 18, 2016 7:29 am

Re: What is happening to Lufthansa?

Thu Oct 22, 2020 11:21 am

tommy1808 wrote:
mchei wrote:
My company has paid considerably more for intra-European flights than for flights to PHL in Y+, for example. .


:checkmark:
my most expensive flight FMO-MUC cost my boss more than my least expensive flight to TPE.....

best regards
Thomas

FMO is just poorly connected, which drives prices. 3+ hours to FRA by train or 6+ hours to MUC. Going by car doesn't get much better. Anybody who's on a budget can choose nearby DUS, DTM or BRE (1-2 hours by train or car) with plenty of LCC services. FMO is used primarily by those who can't afford to waste that time, and airlines factor that into their prices.
 
tommy1808
Posts: 14404
Joined: Thu Nov 21, 2013 3:24 pm

Re: What is happening to Lufthansa?

Thu Oct 22, 2020 11:24 am

mxaxai wrote:
tommy1808 wrote:
mchei wrote:
My company has paid considerably more for intra-European flights than for flights to PHL in Y+, for example. .


:checkmark:
my most expensive flight FMO-MUC cost my boss more than my least expensive flight to TPE.....

best regards
Thomas

FMO is used primarily by those who can't afford to waste that time, and airlines factor that into their prices.


:checkmark:
that is exactly why we sometimes fly to MUC or STR instead of train/car + Hotel.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Capricorn
Posts: 190
Joined: Mon Jul 27, 2020 1:11 pm

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

Sun Oct 25, 2020 10:01 pm

Apparently Situation got worse at LH and they are again looking to cut capacity group wide. Therefore parking lots of planes again for winter. I guess with the strong European emphasis of cheeping C19 cases low, there is little to no prospect of flying during Northern winter in Europe.

Since the capacity cannot be increased as planned, Lufthansa has to shut down 125 aircraft again, writes the Lufthansa executive suite. They also want to use efficient aircraft as much as possible in order to keep fuel costs low. It is being examined whether four more Airbus A350s, which are currently not used in Munich, will be moved to Frankfurt.
The Swiss subsidiary Swiss (International Airlines) is currently in the process of examining whether to fly all short and medium-haul flights with the Airbus A220 and A320 Neo. All older-generation Airbus A320s would then be decommissioned. “Almost” the entire Austrian A320 fleet is also threatened with grounding. Primarily considerations are ongoing of using Embraer and Dash 8. Eurowings will be flying with fewer than 30 aircraft.
"Wherever possible, spare parts are used from inactive aircraft of all fleets," it continues. In addition, the major maintenance work that was planned for the Boeing 747-400 which would have extended its service life is canceled.


Interesting that LH wants to use its newest aircraft as much as possible, but it does seem like LH has to penny pinch as much as possible. And I wonder how many of the 125 aircraft will eventually return to service, as LH also has many on order and downsizing is to some degree inevitable.

Source (in German)
https://www.aerotelegraph.com/lufthansa ... oronavirus
 
mxaxai
Posts: 2490
Joined: Sat Jun 18, 2016 7:29 am

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

Sun Oct 25, 2020 11:26 pm

Capricorn wrote:
Apparently Situation got worse at LH and they are again looking to cut capacity group wide. Therefore parking lots of planes again for winter. I guess with the strong European emphasis of cheeping C19 cases low, there is little to no prospect of flying during Northern winter in Europe.

Not limited to LH, though. All EU airlines are facing lower traffic than expected in Q4 and are reducing schedules. Depending on how the pandemic evolves, I think we might see some improvement in Q1 but I wouldn't bet on it. The measures taken in March brought C19 infections to a reasonable level by May, so this 2. wave might be under control just before christmas (... and people will go visit friends and family and we'll have a 3. wave by February 21 if no vaccine ...). Winter is low season anyway.
 
777luver
Posts: 428
Joined: Fri Jun 26, 2020 2:44 am

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

Mon Oct 26, 2020 12:01 am

Wonder if this will affect their long haul flights? Canada has been taken off the EU white list so could see them pull out of Canada but what about the other markets
 
777luver
Posts: 428
Joined: Fri Jun 26, 2020 2:44 am

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

Mon Oct 26, 2020 12:47 am

Capricorn wrote:
Apparently Situation got worse at LH and they are again looking to cut capacity group wide. Therefore parking lots of planes again for winter. I guess with the strong European emphasis of cheeping C19 cases low, there is little to no prospect of flying during Northern winter in Europe.

Since the capacity cannot be increased as planned, Lufthansa has to shut down 125 aircraft again, writes the Lufthansa executive suite. They also want to use efficient aircraft as much as possible in order to keep fuel costs low. It is being examined whether four more Airbus A350s, which are currently not used in Munich, will be moved to Frankfurt.
The Swiss subsidiary Swiss (International Airlines) is currently in the process of examining whether to fly all short and medium-haul flights with the Airbus A220 and A320 Neo. All older-generation Airbus A320s would then be decommissioned. “Almost” the entire Austrian A320 fleet is also threatened with grounding. Primarily considerations are ongoing of using Embraer and Dash 8. Eurowings will be flying with fewer than 30 aircraft.
"Wherever possible, spare parts are used from inactive aircraft of all fleets," it continues. In addition, the major maintenance work that was planned for the Boeing 747-400 which would have extended its service life is canceled.


Interesting that LH wants to use its newest aircraft as much as possible, but it does seem like LH has to penny pinch as much as possible. And I wonder how many of the 125 aircraft will eventually return to service, as LH also has many on order and downsizing is to some degree inevitable.

Source (in German)
https://www.aerotelegraph.com/lufthansa ... oronavirus


LH has talked about deferring widebody deliveries
 
Blerg
Posts: 4737
Joined: Tue Jan 09, 2018 11:42 am

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

Mon Oct 26, 2020 6:08 am

According to this source, another four A350s will be moved from Munich to Frankfurt. Also, it seems that this winter Lufthansa will massively focus on its operations in Frankfurt, further reducing its presence in Munich. It really makes me wonder how long it will take for them to rebuild their presence in MUC, especially with sluggish demand in winter.

https://www.handelsblatt.com/unternehme ... JCaTK2-ap4
 
factsonly
Posts: 3080
Joined: Mon Aug 06, 2012 3:08 pm

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

Mon Oct 26, 2020 8:56 am

Blerg wrote:
According to this source, another four A350s will be moved from Munich to Frankfurt. Also, it seems that this winter Lufthansa will massively focus on its operations in Frankfurt, further reducing its presence in Munich. It really makes me wonder how long it will take for them to rebuild their presence in MUC, especially with sluggish demand in winter.

https://www.handelsblatt.com/unternehme ... JCaTK2-ap4



This is fully in-line with expectations.
LH is unable to maintain two transfer hubs at traffic levels that are just 20% of 2019.
Like other connecting network carriers (example BA at LGW/LHR), LH will have to concentrate on one hub to remain competitive.
In order to survive, it is all about maintaining sufficient city pairs, frequency and connections through one lower volume connecting hub.
For the time being MUC will therefore focus mostly on point-to-point, with some European connection possibilities.
 
Blerg
Posts: 4737
Joined: Tue Jan 09, 2018 11:42 am

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

Mon Oct 26, 2020 9:16 am

factsonly wrote:
Blerg wrote:
According to this source, another four A350s will be moved from Munich to Frankfurt. Also, it seems that this winter Lufthansa will massively focus on its operations in Frankfurt, further reducing its presence in Munich. It really makes me wonder how long it will take for them to rebuild their presence in MUC, especially with sluggish demand in winter.

https://www.handelsblatt.com/unternehme ... JCaTK2-ap4



This is fully in-line with expectations.
LH is unable to maintain two transfer hubs at traffic levels that are just 20% of 2019.
Like other connecting network carriers (example BA at LGW/LHR), LH will have to concentrate on one hub to remain competitive.
In order to survive, it is all about maintaining sufficient city pairs, frequency and connections through one lower volume connecting hub.
For the time being MUC will therefore focus mostly on point-to-point, with some European connection possibilities.


No one is disputing what you wrote, however what I am wondering is what will it mean for MUC's future. Will they focus on attracting a new partner or will they wait out for the storm to pass and for LH to hopefully and eventually make a comeback.

Would be fun if MUC made a deal with Wizz Air though I don't see that happening.
 
User avatar
seahawk
Posts: 10170
Joined: Fri May 27, 2005 1:29 am

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

Mon Oct 26, 2020 9:30 am

Wizz Air does not give the airport Long haul connections.
 
steman
Posts: 1668
Joined: Wed Aug 09, 2000 4:55 pm

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

Mon Oct 26, 2020 9:56 am

One would question the viability of MUC as intercontinental hub. Although the city is host to many blue chips company and the inhabitants are wealthy, it shows that when things go bad in the whole airline industry, MUC loses more long haul connections than FRA. In my opinion this shows that MUC was a sort of artificial hub, created by LH with the support of Bavarian Government almost out of the nothing, not unline DXB. It works when things are good but it shows its limits when things go bad.
Not to mention the irony of LH moving most of the A380s, basing all of the A350s and moving some long haul connections to MUC as a revenge on FRA for opening to FR and now they move back 8 A350s (half of the current fleet) to FRA and cut destinations in MUC.
 
RvA
Posts: 478
Joined: Tue Sep 15, 2015 12:37 pm

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

Mon Oct 26, 2020 10:23 am

steman wrote:
One would question the viability of MUC as intercontinental hub. Although the city is host to many blue chips company and the inhabitants are wealthy, it shows that when things go bad in the whole airline industry, MUC loses more long haul connections than FRA. In my opinion this shows that MUC was a sort of artificial hub, created by LH with the support of Bavarian Government almost out of the nothing, not unline DXB. It works when things are good but it shows its limits when things go bad.
Not to mention the irony of LH moving most of the A380s, basing all of the A350s and moving some long haul connections to MUC as a revenge on FRA for opening to FR and now they move back 8 A350s (half of the current fleet) to FRA and cut destinations in MUC.


Wealth doesn‘t matter if you are not able to travel anywhere, or don‘t want to.
There was nothing artificial about MUC as a hub, but if you have to focus right now on one hub only it makes sense that its Frankfurt, as it was their main hub before the crisis too. Also worth keeping in mind the cargo operation at FRA is larger so it also makes sense from that perspective to focus on consolidating there.
I wouldn‘t read anything into it in regards to the status of MUC as a hub.
 
Blerg
Posts: 4737
Joined: Tue Jan 09, 2018 11:42 am

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

Mon Oct 26, 2020 10:33 am

seahawk wrote:
Wizz Air does not give the airport Long haul connections.


At this point I think Munich would gladly take additional short haul connections, especially since Wizz Air is not exclusively linking eastern and western Europe.
 
User avatar
seahawk
Posts: 10170
Joined: Fri May 27, 2005 1:29 am

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

Mon Oct 26, 2020 12:49 pm

Blerg wrote:
seahawk wrote:
Wizz Air does not give the airport Long haul connections.


At this point I think Munich would gladly take additional short haul connections, especially since Wizz Air is not exclusively linking eastern and western Europe.


But it is not what the airport wants in the long run. And in the end the debate is pointless at the moment, with traffic figures expected to go down to 20% of 2019 or less again, you can barely make one hub work and Frankfurt is geographically better placed and has the stronger Cargo area, which is very important today.
 
Capricorn
Posts: 190
Joined: Mon Jul 27, 2020 1:11 pm

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

Mon Oct 26, 2020 1:26 pm

I think it is a realistic prospect that LCC will come out much stronger of the C19 crisis. Their core customer groups (VFR and Tourists) seem more willing to fly once travel is more or less made possible again and they serve the price sensitive crowd, which for 10€ less is gladly flying around in a FR style cattle hauler. I don't think many legacies can compete with these 20€ fares, especially if counter financing from the once profitable long haul operation is no longer possible. Furthermore, the ULCCs pan European structure makes it easier to adjust their routs as the C19 situation demands, like W6 suddenly flying in domestic Norway or Italy. Though ULCCs usually have no significant Cargo ops.

IMO what happened at VIE before Corona will be replicated at airports across Europe. IMO ULCCs will move to more prime airports as VFR and tourism will make up a bigger percentage of total flying customers. Therefore I do think it is very much possible for MUC to have more LCC service in the future, similar to VIE.
 
Blerg
Posts: 4737
Joined: Tue Jan 09, 2018 11:42 am

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

Tue Oct 27, 2020 6:41 am

seahawk wrote:
Blerg wrote:
seahawk wrote:
Wizz Air does not give the airport Long haul connections.


At this point I think Munich would gladly take additional short haul connections, especially since Wizz Air is not exclusively linking eastern and western Europe.


But it is not what the airport wants in the long run. And in the end the debate is pointless at the moment, with traffic figures expected to go down to 20% of 2019 or less again, you can barely make one hub work and Frankfurt is geographically better placed and has the stronger Cargo area, which is very important today.


How do we know what MUC wants in the long-run, especially now when LH decided to focus on FRA?
 
User avatar
seahawk
Posts: 10170
Joined: Fri May 27, 2005 1:29 am

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

Tue Oct 27, 2020 7:18 am

It is a decision based on the current situation not a decision for the long run at LH either.
 
RvA
Posts: 478
Joined: Tue Sep 15, 2015 12:37 pm

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

Tue Oct 27, 2020 7:56 am

I doubt anyone is making decisions exclusively looking at the current and near term and not taking into account mid term and beyond. Not sure what all the fuss around MUC is all about.
 
galleypower
Posts: 268
Joined: Wed Jan 15, 2014 12:54 pm

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

Tue Oct 27, 2020 8:56 am

Blerg wrote:
factsonly wrote:
Blerg wrote:
According to this source, another four A350s will be moved from Munich to Frankfurt. Also, it seems that this winter Lufthansa will massively focus on its operations in Frankfurt, further reducing its presence in Munich. It really makes me wonder how long it will take for them to rebuild their presence in MUC, especially with sluggish demand in winter.

https://www.handelsblatt.com/unternehme ... JCaTK2-ap4



This is fully in-line with expectations.
LH is unable to maintain two transfer hubs at traffic levels that are just 20% of 2019.
Like other connecting network carriers (example BA at LGW/LHR), LH will have to concentrate on one hub to remain competitive.
In order to survive, it is all about maintaining sufficient city pairs, frequency and connections through one lower volume connecting hub.
For the time being MUC will therefore focus mostly on point-to-point, with some European connection possibilities.


No one is disputing what you wrote, however what I am wondering is what will it mean for MUC's future. Will they focus on attracting a new partner or will they wait out for the storm to pass and for LH to hopefully and eventually make a comeback.

Would be fun if MUC made a deal with Wizz Air though I don't see that happening.


They will sit it out. With low demand it makes more sense to focus on one HUB to offer a maximum of connections to fill longrange flights. The A350 seems to be the best aircraft for it. Almost the same bellyspace as a B748, but with 15% lower tripcost. If you can fill her. Penalty is the crew cost, since they are ferried in from MUC. But considering the package, the savings seem worth the effort. IIRC approx 20mio/aircraft over the WS.
 
User avatar
mercure1
Posts: 5128
Joined: Sun Jul 13, 2008 5:13 am

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

Thu Nov 12, 2020 4:37 pm

To boost liquidity Lufthansa issued €600 million in bonds due 2025.

https://investor-relations.lufthansagro ... sures.html
mercure f-wtcc

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