Lufthansa med megatap i 2020 - Også Etihad sliter - Curt Lewis

 

Lufthansa weighs faster plane retirements after record loss

BERLIN (Reuters) - Lufthansa may permanently ground more jets to emerge leaner from the coronavirus pandemic, the German airline group said on Thursday, as it reported a record 6.7 billion euro ($8.10 billion) loss for 2020.

The group, which also owns Austrian Airlines and the Swiss and Eurowings brands, trimmed its 2021 capacity plans as COVID-19 disruption drags on, but held out hope for a summer upturn.

“We are examining whether all aircraft older than 25 years will remain on the ground permanently,” Chief Executive Carsten Spohr said, pledging to make 2021 “a year of redimensioning and modernisation” for the company.

Lufthansa reported a 1.14 billion-euro ($1.38 billion) fourth-quarter net loss with a 1.29 billion deficit in adjusted earnings before interest and tax (EBIT). Revenue fell 71% to 2.59 billion euros.

Its shares were down 0.4% at 12.73 euros as of 0841 GMT in Frankfurt, after gaining nearly 15% since the start of the year on recovery hopes.

Bernstein analyst Daniel Roeska said that despite “tangible progress” on cost-cutting at its airline subsidiaries, “Lufthansa mainline is still stuck at step one” with short-term crisis union agreements.

“More needs to happen - and faster,” Roeska said.

Lufthansa cut its global workforce by 20% to 110,000 in 2020 and is seeking to eliminate another 10,000 German jobs or equivalent wage costs.

The group, which received a government-backed 9 billion euro bailout last June, said it will operate at 40-50% of pre-crisis capacity this year, down from an earlier 40-60% forecast.

Summer travel will nonetheless pick up swiftly whenever restrictions are eased, Spohr said, and Lufthansa stands ready to restore 70% of its flight schedule “in the short term”.

The group’s full-year net loss of 6.73 billion euros was on 13.59 billion euros in revenue, down 63%. The company predicted a narrower 2021 EBIT loss than last year’s 5.45 billion euros.

Analysts had expected losses of 6.63 billion euros for 2020 and 1.24 billion euros for the last three months, according to Lufthansa’s consensus polling.

The airline group has outlined plans to cut its fleet to 650 planes in 2023 and phase out ageing Boeing 747-400s and Airbus 340-600s. A slower recovery means more grounded planes may never return to service before retirement.

Operating cash burn was reduced to 300 million euros per month in the fourth quarter and is expected to remain stable at that level in the first three months of 2021, the company said.

Like many airline peers, Lufthansa posted record 2020 cargo profits as mass aircraft groundings squeezed capacity and sent freight prices soaring. Divisional adjusted EBIT jumped to 772 million euros from 1 million, dwarfed by passenger losses.

Net debt increased to 9.9 billion euros as of Dec. 31 from 6.7 billion a year earlier, while total liquidity stood at 10.6 billion euros including 5.7 billion euros in unused aid.

“We have sufficient liquidity to withstand a market environment that remains difficult,” Chief Financial Officer Remco Steenbergen said.

Abu Dhabi’s Etihad Airways reports $1.7 billion loss in 2020

DUBAI, United Arab Emirates (AP) — Abu Dhabi’s national carrier Etihad on Thursday reported core operating losses of $1.7 billion in 2020, reflecting the severe toll of the coronavirus pandemic on the long-troubled airline that has lost billions in recent years.

Etihad reported revenues of $2.7 billion in 2020 compared to $5.6 billion the year before, a precipitous decline it attributed to “drastically fewer people traveling” as the surging pandemic crippled air travel.

But the airline, one of the Middle East’s top carriers, struggled with financial losses long before the pandemic wiped out the global aviation industry. Since 2016, Etihad has lost a total of $5.62 billion as it has aggressively bought up stakes in airlines from Europe to Asia to compete against the region’s other leading airlines, Dubai-based Emirates and Qatar Airways.

With cost-cutting measures, the company was just starting to recover from the economic pain early last year. It announced the sale of 38 aircraft to an investment firm in an attempt to bolster profits, in a deal valued at $1 billion.

Then, the pandemic struck. Last March, the United Arab Emirates halted flights to stem the spread of the virus. Passenger traffic plummeted to just 4.2 million travelers from 17.5 million the year before, the airline said. Total passenger capacity on planes dropped 64%. The carrier lost $758 million over the first half of 2020 alone. The losses rippled across the company, forcing the airline to cut 33% of its workforce and slash salaries by 25-50%.

By comparison, Etihad lost $870 million in 2019. The airline reported losses of $1.28 billion in 2018 and $1.52 billion for 2017.

While rollout of coronavirus vaccines has stoked hopes for a global return to travel, the industry is not expected to see meaningful recovery for months, until vaccines are widely administered.

Still, Etihad CEO Tony Douglas struck an optimistic tone in the earnings announcement.

“While nobody could have predicted how 2020 would unfold,” he said, “Etihad stood firm and is ready to play a key role as the world returns to flying.”

Abu Dhabi’s rulers launched Etihad in 2003, rivaling the established Dubai government-owned carrier Emirates, which boasts a larger fleet and far-flung network. Emirates flies out of Dubai International Airport only 115 kilometers (70 miles) away from the capital of Abu Dhabi. The two airlines compete in the long-haul carrier market, using their nation’s location as a key east-west transit point to their advantage.