Analysis for Europe/MEA
Following Etihad’s first annual profit, the Abu Dhabi-based airline reported revenue jumped 28% year-on-year for the three months to 31-Mar-2012, to a record USD989 million.
The increase corresponds to a 27.4% surge in passenger traffic in the quarter, up by just over half a million passengers, indicating Etihad is growing revenue very slightly ahead of capacity growth. Etihad Airways added new services to Tripoli, Shanghai and Nairobi during the quarter, with passenger numbers reaching 2,360,000.
The Lufthansa Group has reported a positive overall result for 2011 with an operating profit of EUR820 million. But this represents a EUR200 million drop in operating profits compared to 2010 as the airline dealt with weaker economic conditions within the EU, rising fuel prices and increasing regulatory pressures through environmental taxation. 2012 will see the Group search for synergies and cost savings under its 'SCORE' programme, and increased attention will be paid to Austrian Airlines as it attempts to return to profitability through restructuring.
Lufthansa Group’s revenue in 2011 rose 8.6% to EUR28.7 billion. The Group incurred a net loss of EUR13 million but this was driven by a EUR285 million loss “from discontinued operations”. This resulted from the Group’s sale of bmi to the International Consolidated Airlines Group (IAG) in late Dec-2011.
Air France-KLM has reported an operating loss of EUR353 million for 2011, a significant turnaround from its 2010 profit of EUR28 million - and follows Lufthansa's 18% year-on-year decline in operating profit to EUR820 million last year. This has been a difficult year for the Franco-Dutch airline group, as it battled rising fuel prices and uncertainty across many of its markets. The start of 2012 saw the Group launch ‘Transform 15’, its turnaround programme aimed at restoring profitability. The 2011 loss emphasises the need for this programme to deliver results, given a continuing uncertain outlook as Europe's economic troubles persist amid high fuel prices.
The Group’s revenue was unable to absorb rising fuel expenses; although total revenues increased by 4.5% year-on-year to EUR24.36 billion, operating costs rose 6.2% to EUR24.72 billion. Fuel expenses alone surged 16.3% year-on-year.
International Consolidated Airlines Group (IAG) reported a strong FY2011 result with profit more than doubling year-on-year despite its fuel expense increasing nearly 30%. British Airways led the strong result while Iberia still struggled. The 2012 outlook for the Group remains uncertain due to weak European markets and labour unrest in addition to rising fuel expenses.
IAG reported full year operating profit of EUR485 million and net profit of EUR527 million. Fuel expenses rose 29.7% to EUR5.1 billion. Passenger revenue outgrew capacity increases with 11% higher revenue and capacity increase of 7.1%. Unit passenger revenue rose 3.6% with overall unit revenue up 3.1% while premium traffic saw good growth of 5.7% and outgrew non-premium revenue growth. Despite increases on the passenger side of the business, cargo revenue remained constant.