Fly with Lufthansa has become considerably cheaper in the last three months – but not as cheap as it in view of lower oil prices could have been. This is apparent from the quarterly figures the airline out that they presented on Thursday
The average prices of the tickets fell for about three months significantly -. Namely by 5.7 percent. According to CFO Simone Menne this was the biggest drop in three years.
At the same time the profit of the airline rose significantly. Europe’s largest airline group namely the division kerosene EUR 309 million, the adjusted pre-tax profit (EBIT) increased from EUR 178 million to € 468 million. That’s an increase of almost 163 percent.
This means that when the ticket prices is still air down. Previously it had Lufthansa not necessary to cut prices further, because she could compete at this level with the rivals.
But grab from autumn boarding with a new offensive in Germany. Both Ryanair and Easyjet are offering from autumn significantly more flights to and within Germany. In addition, the will can also Star Alliance partner Turkish Airlines start in Germany’s budget airlines AnadoluJet
Hedging or not -. That is the question
CFO Menne said, so they expect that by the end of the year the price level further” will be rapidly declining. ” She looks in the advance bookings “from September in Germany because of the low cost carriers increasing capacity and price pressure.”
The airlines react differently to the low oil prices. There are airlines that hedge their prices to oil price fluctuations – in the jargon “hedge” – and others who do not do this
Those who do not. do her kerosene can purchase the currently extremely low price. Lufthansa operates hedging. This means:. You zurrt through financial instruments the price of kerosene at a certain level for a longer period fixed
When prices rise above this level, it has more favorable conditions. With the currently very low oil prices in the Lufthansa buys her kerosene but more expensive than other airlines.
Menne said airlines without hedging benefited “currently disproportionately” from the low oil prices. According Menne competitors reduce currently increasingly the ticket prices and set so the Lufthansa under pressure.
The effect of the euro’s weakness
The competition Airlines go thus also a higher risk. If oil prices suddenly extremely rising, fuel costs would explode for them. In the past, among other things, Ryanair and Air Berlin have had bad experiences with it. Both airlines hedge today.
One to one, the oil price decline makes will not work for the airlines noticeable kerosene must like all products, which are made from oil, paid world with dollars. And that has become much more compared to last year in the last few months.
For companies from the euro area the purchase of kerosene is thus expensive. The effect is mitigated because a global corporation, Lufthansa has also revenue in dollars, which can be used on kerosene.
it is our experience very difficult ” prices again to get high when oil prices rise again “. This also explains why give Lufthansa and competitors such as Air France or British Airways, the lower fuel prices will not continue. You reduce or cancel their fuel surcharges as well.
Net price, taxes, fees, surcharge
Most airlines had at the time when oil prices had risen sharply in the new millennium, introduced fuel surcharges. They were established, as a rule, as the price of crude oil was 100 dollars per barrel in order. There are currently around $ 54 must be paid.
The Lufthansa has no explicit fuel surcharge more on the ticket account since the beginning of 2014 from. The tax itself is but continue to be collected and then hides itself under the item entitled “International / National Award”.
The ticket price thus currently consists of the net price, the surcharge and national taxes and charges. This gets the customer even when not rebookable ticket from the airline refunded.
The four fee rates increase with the length of the route, or depending on the target area and are in the Economy Class is currently at 80, 160, 180 or 200 euros. The auction is in European traffic between ten and 200 euros.
For Business and First Class passengers will in future each direction 100, 210, 230 or 250 Euro due.
No transparency of tickets
The “surcharge” will “not part of the controllable costs covered, “it says at Lufthansa. This includes flight safety charges or expenses for emissions trading in Europe.
For passengers, this means that they no longer understand now in detail to her account can, what you what and in what amount, the airline into account. The Lufthansa subsidiary German Wings Airline no longer has a contract even on their tickets out – just like the competitor Ryanair or Easyjet. They publish only final prices on the internet.
Every day, thousands of changing prices at Lufthansa. “The prices are determined by the market,” it says so. The price for a particular flight so there is not, because sometimes it takes many months before an aircraft is fully booked.
Watch During this time, Airline Manager – supported by intelligent IT systems – the prices of competitors and raise or lower, for example, the prices of certain quotas seat several times a day. So they are trying to achieve an optimal price mix with the highest utilization of the aircraft.
Unlike the low cost airlines, this is for the so-called network carriers such as Lufthansa or Air France much more difficult, since they have to take a certain number of passengers on flights to their hubs, which then change there to long-haul aircraft.
Often fly them on the short sea for nothing, because the Lufthansa has to compete, for example, on the route Berlin-New York with a direct connection of Air Berlin. Lufthansa customers need to change hand in Frankfurt, which takes longer and is therefore more demanding.
supplements as pawns
But not only the so-called net prices, but also the surcharges are not fixed. Because according to Lufthansa also this be changed if the price manager can go through, for example, special offers.
So, there are the new pricing model, a minimum price for a German domestic ticket, which stands at 89 euros. Thus the Lufthansa mind at all deserve, the surcharges are here, for example, lowered so that a positive net rate remains on paper.
The question remains why Lufthansa surcharges ever yet used in pricing? This firstly has the reason that the airlines want to continue to have the ability to respond flexibly to changes in the oil price.
On the other hand the award gives them also technically the opportunity to change all ticket prices for certain flights or dates very quickly, without having to change the stored in the IT system net prices.
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