Lufthansa Passenger Airlines Lufthansa Investor Day 2011

Transcription

1 Lufthansa Passenger Airlines Lufthansa Investor Day 2011 Kay Kratky Member of the Lufthansa German Airlines Board Frankfurt & Flight Operations Thomas Klühr Member of the Lufthansa German Airlines Board Munich & Direct Services Zurich, 21 st September

2 The new board represents a new organizational structure with a good balance of strong divisions and central governance Lufthansa German Airlines Board from April 2011 CEO Lufthansa German Airlines Finance & HR Sales & Revenue Mgt. Frankfurt & Flight Operations Munich & Direct Services Carsten Spohr Dr. Roland Busch Jens Bischof Kay Kratky Thomas Klühr Business Development Product & Marketing Controlling Human Resources Procurement Commercial Airport Relations Information Management Revenue Mgt & Sales Development Global Key Account Mgt Global Leisure & Online Sales Sales Germany Area Mgts Commercial Operations Station & Infrastructure Cabin Crews Commercial Operations Station & Infrastructure Cabin Crews Direct Services Division Italy 1

3 Lufthansa reached a size which requires an allocation of previously centralized functions to the divisions for future growth DUS welcomes as many guests as DIR takes-off as often as MUC has as many employees as FRA offers as much capacity as all divisions and Lufthansa G Group members together. 2

4 Full-fledged program aiming for profitable growth of Lufthansa Passenger Airlines combined with operational excellence initiative Climb 2011 Runway Opening FRA + MUC NextGen Revenue Management Profitability Product Investments Onboard + Ground Terminal Expansion FRA+MUC Fleet Development + Rollover 3

5 Lufthansa s mega hub has eventually the potential to grow again 95 Forecast Passenger Growth million PAX p.a.* Terminal Capacity FRA million PAX p.a.* million PAX p.a % p.a Opening 1 st Modul T Opening 4th-Runway winter timetable 11/12 Capacity limit before opening 4th runway Opening 2 nd Modul T3 Opening Concourse A-Plus summer timetable 12 4

6 Opening of LH exclusive concourse A-Plus in summer 2012 A clear upgrade to premium quality Offers additional capacity for 6 million passengers per year Efficient handling processes at 23 new gates with customer oriented layout Five new lounges on an area of more than 7,500 sqm in new premium design Quality of stay offered by a spacious shopping area on more than 10,000 sqm in the Atrium Opening in two stages: on 30 th June and 06 th August

7 Continuous product & process innovation support future growth Ground Product Onboard Product Enhancement of service & infrastructure Refinement and expansion of lounges Redesign and improvement of electronic check-in and boarding processes New design & extension of onboard product Upgrade First & Economy Class cabin interior Roll out of new business class to long haul fleet Extension of individual IFE and FlyNet coverage Increased customer satisfaction and brand loyalty secure LH s competitive position 6

8 The largest overall onboard modernization program in LH history A380 incl. New F/Cl New A330 FlyNet II Ongoing Implementation Short haul Long haul NEK F/Cl Retrofit Airbus Fleet B744 Y/Cl Retrofit incl. Inseat Screens B748 incl. New C/Cl Full-Flat Retrofit New C/Cl Long Haul NEK Regio Decided

9 Terminal 2 will reach its capacity limit of 25 million passengers in 2011, therefore a new satellite is needed to cover future growth Munich Terminal 2 Terminal 2 and its capacity limit Best Airport Awards 2011 Opened on 29th June 2003 Joint Venture: FMG (60%) and LH (40%) Capacity: 25 Mio passengers per year Contact positions: 24 Exclusively used by Lufthansa Star Alliance and partners Passengers in million Capacity limit Terminal 2: 25 million Passengers Best airport in Europe: 1 st place Best airport in central Europe: 1 st place Best airport worldwide: 4 th place Best entertainment program worldwide : 2 nd place 30 minutes minimum connecting time * Actual prognosis Building the Satellite is essential to cover growth and maintain the high quality of the Munich airport 8

10 The satellite in conjunction with the new runway are the key success factors for ensuring the growth at the quality hub Munich Climb 2011 Satellite Memorandum of understanding was signed on 13 th July 2011 Enlargement of capacity: 11 m additional passengers 27 contact positions Possibility of A380 and B748 Handling Joint Venture: FMG (60%) and LH (40%) Start of building satellite in Q4/11, will be opened in summer 2015 Passenger Transport System (PTS) of the Satellite The underground automated people mover is connected with Terminal 2 Covers the transport of all the different passenger groups: Schengen, Non-Schengen and Unclean New Runway in Munich Plan approval of new runway in Munich was given on 26 th July 2011 The new runway is planned to be opened in movements / hour Length: 4000 meter 9

11 Climb 2011, the cost saving-program of LH Passenger Airlines, shows its effects: the goal of 1 billion EUR will be realized in 2012 Climb 2011 Overhead Suppliers Staff Productivity Revenue Fleet Structure & Capacities 420 m EUR End of H1 End of 2011 End of m EUR savings 610 m EUR expected savings Climb 2011 Target: m EUR 10

12 In order to achieve our goals for Climb 2011 we continue to pursue our focus topics Sub Projects Targets Status Examples Overhead -20% (400 jobs) staff capacity in administrative functions 70% achievement (280 contracts) Hiring freeze for administrative jobs extended Suppliers Staff Productivity Revenue Contributions of internal and external suppliers Reduce staff unit costs by 10 percent Increase seating capacity and introduce new pricing models Reduce distribution cost, e.g. optional payment charge Fuel Efficiency projects Divisional maintenance concepts LH Technik Dynamic scope clause extended to 95 seaters Productivity increases in all areas e.g. operational personnel +5,1%* ~80 % of the Kont A/C are already equipped with the new short-haul seat, by the end of the year all A/C will be refurbished New pricing & sales processes for non-hub traffic:+10.4% Pax* Fleet Structure & Capacities Reduce complexity on short-haul Roll-over of short-haul fleet No more scheduled services with 50-seater aircraft since July % fleet productivity in non-hub traffic Reduction of unit costs in direct traffic -13%* * vs PY 11

13 The restructuring of Lufthansa s Direct Services is well under way, all decided measures are delivering the expected results 1 Cost Management 2 3 Capacity Management Market Approach Unit cost reduction by 40% Increase staff productivity >10% (stations, cabin, cockpit) Rightsizing stations staff (~7%) Redesign handling contracts Restructuring of regional airlines (reduction of about 600 jobs, fleet commonality) Third party passenger handling (BRE, CGN, HAJ, NUE) MRO (homebase program) Reduction of fleet complexity and increase in gauge Increase earning capacity Higher A/C productivity >10% Expansion Airbus fleet Phase out 50/70- seater no A/C < CR9 Concentrate on four focus markets Growth and regaining of market share New pricing concepts (e.g. oneway pricing) Product improvement (especially economy class) Investment in innovative marketing campaigns targeted on focus markets Acquisition of new customer groups (e.g. tour operator) New M&M-features Redesigned LH.com 12

14 The measures undertaken by Direct Services are already reflected in a significant improvement in earnings of 50% reduction of loss KPI Development Direct Services (2011 vs. 2009) +39% ASK +38% PKT +39,8% Ø Gauge Size SLF # of Flights Yield/Pax -0,5-8% Direct Costs per ASK* -4% -30% Positive contribution margin in 2013 * Without Fuel & Air Traffic Taxes 13

15 Next generation Revenue Management contributes significantly to our revenue quality New Price Concepts Europe New Rev. Mgt. Tools Y Differentiation to the max! B... Competitve edge fares, more pricepoints, better upsell State-of-the-art forecaster considers hybrid customer buying behaviour Steering can be differentiated by (micro-) market segment Better sales of ASK growth while simultaneously skimming the willingness to pay 14

16 Lufthansa Passenger Airlines*: Performance in the current year cum. Jan - Aug 2011 vs. PY in % ASK (m) 121, RPK (m) 94, SLF (%) pts. Passengers (in 1,000) 43, Flights 443, *incl. Lufthansa Regional carrier and Lufthansa Italia 15

17 Development of traffic regions Lufthansa Passenger Airlines January August 2011 Americas Europe Asia / Pacific ASK +11.1% ASK +16.9% ASK +13.5% RPK +9.0% RPK +16.2% RPK +8.6% SLF -1.6PP SLF -0.5PP SLF -3.8PP Total Middle East / Africa Premium share of long-haul revenue ASK RPK +13.5% +10.7% ASK RPK +12.1% +7.8% 50.8% 50,8% 52,8% 52.8% SLF -2.1PP SLF -2.8PP H H

18 In July 2011 Lufthansa Passenger Airlines adjusted growth for the winter timetable already, now a second adjustment was decided Winter capacity adjusted LH Passenger Airlines winter timetable 2011/ % +4% Network expansion/ growth +1% base effect -6% First adjustment, e.g. Postponement of planned new destinations / services Reduction of frequencies Discontinuation of Lufthansa Italia +7 % productivity increase +6% -2% Second adjustment, e.g. +4% Critical review of every single flight planned Capacity reduction on underperforming roundtrips on a single day basis Winter timetable 2011/12 before adjustment Winter timetable 2011/12 first adjustment Winter timetable 2011/12 second adjustment 17

19 Disclaimer in respect of forward-looking statements Information published in this presentation with regard to the future development of the Lufthansa Group and its subsidiaries consists purely of forecasts and assessments and not of definitive historical facts. These forward-looking statements are based on all discernible information, facts and expectations available at the time. They can, therefore, only claim validity up to the date of their publication. Since forward-looking statements are by their very nature subject to uncertainties and imponderable risk factors such as changes in underlying economic conditions and rest on assumptions that may not or divergently occur, it is possible that the Group's actual results and development may differ materially from those implied by the forecasts. Lufthansa makes a point of checking and updating the information it publishes. It cannot, however, assume any obligation to adapt forward-looking statements to accommodate events or developments that may occur at some later date. It neither expressly nor conclusively accepts liability, nor gives any guarantee, for the actuality, accuracy and completeness of this data and information. 18

20 Lufthansa Passenger Airlines Lufthansa Investor Day 2011 Kay Kratky Member of the Lufthansa German Airlines Board Frankfurt & Operations Thomas Klühr Member of the Lufthansa German Airlines Board Munich & Direct Services Zurich, 21 st September