or lack thereof.

Lufthansa is reporting a 152 million Euro loss for 2009 compared to a 1.3 billion Euro profit in 2008.  No doubt that declining markets in Europe can account for a good portion of this reversal in fortunes particularly considering that the decline in Europe lagged behind that of the United States (and is likely to lag behind the US in recover too.)

However, their addition of Austrian Airlines and British Midland in 2009 is also highly suspect.  I’ve been suspicious of their multi-brand strategy in Europe for a while and more so now after seeing their financial results.  Adding sub-performing airlines to the portfolio is never a strategy that works in the long run (witness the demise of the original Swiss Airlines in 2001) and Lufthansa has so far not shown much inclination to benefit from harmonizing operations among the various airlines. 

I also suspect that this loss is only the beginning for 2010 since Lufthansa is faced with labor problems and hasn’t made the moves that other European airlines have made to cut costs and re-structure service offerings (a la British Airways.)

Filed under: Airline News by ajax