Lufthansa Group Reports Rise in 2011 Revenue, Drop in Profits

Deutsche Lufthansa AG increased its revenue by 8.6 percent to 28.7 billion euros in the 2011 financial year and posted an operating profit of 820 million euros, but that operating profit was down 200 million euros compared to the previous year.

Higher fuel costs hurt passenger business results. Its revenues were down from 349 billion euros, a 65 percent decrease from a year earlier. The airline reported a loss of 285 million euros from discontinued operations.

This included the current result recorded by the group company British Midland Ltd. (bmi), which is due to be sold to the International Airlines Group. The group also paid air traffic tax totaling 361 million euros to the German and Austrian authorities.

The group’s adjusted operating margin for 2011 was 3.4 percent. This is why Lufthansa rolled out a group-wide program called SCORE in January with the aim of sustainably improving its result by at least 1.5 billion euros by the end of 2014. By implementing this program, the group wants to be able to fund its capital expenditure in the long run and safeguard its financial solidity.

Lufthansa also said that it might consider selling its Austrian Airlines unit if it can't turn the struggling carrier around with the SCORE plan.