So Lufthansa turns a profit, while US Airlines face bankruptcy?

[Eurobabe]

What am I missing here? :shrug:

Lufthansa confirms 2008 profit outlook

FRANKFURT, Germany

German airline Deutsche Lufthansa AG on Wednesday confirmed its profit outlook for the year despite the challenging business environment.

The company has "built a solid base for the full year" and expects 2008 profits to "follow up on the previous year's record level," Lufthansa said in a statement from an investor and analyst conference in Munich.

In 2007, the Cologne-based company achieved a profit of euro1.4 billion (US$2.2 billion) on revenues of euro22.4 billion (US$35 billion).

[crim son]

1. I would imagine that the cost of the personnel US Air has had to hire

to yank out nipple rings has had a deleterious effect on the bottom line.

[Deja Q]

4. Oh, come now, nipple rings are nuttin'. They had to pay the personnel even more to

yank out prince alberts... viagra no more, that's all I can say...

:scared:

[babylonsister]

2. There's one biggie that might make a difference; price of fuel

for Lufthansa has always been a lot higher there; here, the airlines are just getting used to it. :shrug:

[TechBear_Seattle]

3. Government subsidies

Ronald Reagan's deregulation of the airline industry also eliminated many of the government subsidies. Since then, US airlines have been operating on a very thin profit, which gets eaten up very quickly when fuel prices soar.

Airlines in Europe are considered key transportation infrastructure, so most nations subsidize them much as they do trains.

[Eurobabe]

8. Wow, what a fucking concept.

Imagine that, key transportation infrastructure. :wow:

[Parche]

5. Lufthansa

Their flights are mostly International which on some routes not a lot of competition
so fares are stable.
Unlike the US where there is stiff competition on most routes, and the airlines are trying to compete with Southwest when they are 2 different airlines, and really dont need to

Most US airlines are top heavy also, with 40-50 VP's, they are concerned about 'market share'
instead of profit and yield which they should be.


:hi:

[SoCalDem]

6. Governmental "interference" is not always a bad thing

Our airlines flourished during the golden age of regulation..

[plcdude]

7. I flew them

back from Munich in May and enjoyed two movies dinner and breakfast and free drinks with less seats and wonderful service and they still made money. Our airline industry must be doing somethings really wrong.

[Eurobabe]

9. not "our" airline industry.

Not no mo. Lufthansa is my airline now. :hi:

[Ichingcarpenter]

10. One executive for United got a $39 million pay package

Other top management also are reported to have "received 2006 compensation packages valued at about $100 million over the course of several years."

They raped the companies.

[Ichingcarpenter]

11. The US bailed out the airlines for $15 billion after 911

The legislation provides an immediate $5 billion in cash assistance to the airlines, together with $3 billion in emergency spending directed by President Bush, as part of the $40 billion appropriated by Congress last week in response to the terrorist attack. In addition, the bill provides another $10 billion in guaranteed loans.

The bailout bill also makes the federal government the insurer of the airline industry for the next 180 days, after which private insurance companies are expected to offer renewed coverage at higher rates. But an amendment that would have guaranteed health insurance for laid-off airline workers for the next year was defeated in the House by a vote of 279-174.

This means that some of the largest corporations in America will have the federal government guaranteeing payment of their bills, while over 100,000 airline workers already laid off, and hundreds of thousands more in travel-related occupations—travel agents, hotel and restaurant workers, car rental employees, etc.—will have to fend for themselves.

[Initech]

As is the standard operating procedure for CEOs these days.

:eyes:

It seems every day there's always a story about how some jackass CEO gets a multi-million dollar severance package while their company suffers.

[TechBear_Seattle]

19. Excellent point

I expect that a single American Airlines executive gets paid several dozen times what the equivalent Luftansa executive gets.

[flyingfysh]

12. there's another biggie: employee health care

In the US, it is expected that most employers subsidize health care policies. In Germany, the government handles that. So there is less overhead for a business there.

[Ichingcarpenter]

13. Executives are paid millions less .. so don't forget that too. n/t

[Hav]

14. I'm not sure about that.

In Germany, I think the employer pays half the cost for health care, the other half the employee. And I think it's the same for the pension fund.

[Eurobabe]

16. genau.

[Eurobabe]

15. WRONG! German employers ALSO subsidize 50% of a workers

healthcare. If you work more than 18 hours, they have to kick in 50%, and the employee kicks in 50%. The healthcare is GOVT. REGULATED.

Unless you are unemployed, then the govt. picks up the tab.

[flyingfysh]

22. it looks like I was mistaken here

Sorry about that.

[Eurobabe]

25. It's okay, now your edumucated on the subject. :)

[salguine]

17. Probably because European governments don't allow European companies

to run their businesses like pyramid schemes and Mafia rackets—they have to actually operate on sound business principles and practices, not make their profits by fleecing, cheating and bailing out just before the company's driven into the ground.

[Eurobabe]

18. thumbs up on this one

:thumbsup:

(unless Berlasconi is involved)

[librechik]

20. Their company doesn't have to pay onerous health care and CEO comp

makes it a little easier

[Eurobabe]

23. Wrong, common misconception about Europe re: healthcare

All employers are required to chip in 50% of the employees healthcare portion once that employee works over 18 hours. The employee pays the other 50%. The main difference is that our healthcare costs are controlled by the government through regulations, AND the employee is not tied to one specific healthcare provider, he/she is free to choose from a wide variety of providers, OR go into a private healthcare system (which is not so regulated).

The CEO thing, yeah, that is true.

[librechik]

33. thx for the info--i did get that message earlier

[Pilotguy]

21. Hey, Southwest Airlines is still profitable. NT

[Eurobabe]

24. They must be doing something right with their management

and cost control then. Good for Southwest, they can take over the rest of the bozos! Or at least give them a boilerplate on how to run an efficient and customer-service oriented company. :hi:

[XOKCowboy]

26. Comparing Lufthansa and Southwest is like apples and pineapples

Southwest is the McDonalds of airlines.

[Eurobabe]

27. I wasn't comparing LH and SW

the other OP posted as such. :hi: and wouldn't that be like comparing apples and bratwurst? :toast:

[XOKCowboy]

28. LOL Yea I guess so..

One of the reasons that Southwest is so profitable is that it was basically a fuel hedge fund that operated an airline. It's not a sustainable strategy and might end up biting them in the end (figuratively).

Flying SWA sucks. I've racked up a lot of flight miles bought by clients who naturally look for the lowest price so when I get a ticket on SWA I cringe. To compare their service to Lufthansa, Japan Air, Air France, Singapore Air, British Airways or even TACA is an insult to real airlines.

[Eurobabe]

30. I had the pleasure, and I say pleasure because it was

of flying my last transatlantic trip with Virgin. Wow, talk about service! I was blown away, it was even better than Lufthansa. Virgin's seatback entertainment system is the best I've encountered (at least on the transatlantic route). Comfy seats with padding, the plane was spotless, compared to the shit seats on USAir, and their disgusting excuses for bathrooms.

I've also heard that Singapore Air, and a few others are even better. Can't judge, never flown to Asia, yet. :hi:

[Indenturedebtor]

31. Singapore air is out of this world. Gourmet food, wine selection, movies, comfy chairs... the works

[Hassin Bin Sober]

29. Customer service?

Ever watch Airline?

:scared:

I'd rather walk/drive.:)

[Nickster]

34. They've got long term oil contracts in the 50 dollar a barrel range, they hedged their bets and they

are reaping the benefits of that, at least until their oil contracts dry up.

[Luminous Animal]

32. I already booked my tickets on Lufthans

to Barcelona in September. It's great to have some reassurance that they won't be going belly-up before then.

[AlCzervik]

35. i flew on Lufthansa when i was in Europe and it was a good experience.

the service was excellent and they have the best truffles evah.

[LeftinOH]

36. Lufthansa is also a MAJOR international carrier- for trips around Europe and via

Europe to Asia, Africa, Middle East.