German airline Lufthansa reiterates it’s prepared for difficult market, sector consolidation

Lufthansa says it’s prepared for difficult market

FRANKFURT — Airline Deutsche Lufthansa AG said Friday it expects the current difficult operating environment to continue in 2009, but that it was well prepared for the economic turbulence and the expected consolidation in the airline industry.

At the company’s annual general meeting, Cologne-based Lufthansa, Germany’s largest airline, reiterated the extent and duration of the current economic crisis can’t be forecast.

“Hard times lie ahead,” the company’s chief executive, Wolfgang Mayrhuber said at the meeting in Cologne.

Mayrhuber said Lufthansa should continue to develop its airline group companies, and should strengthen its alliances and partnerships.

He said the company had laid important foundations in the expected consolidation process in the aviation sector.

The company has made a number of strategic moves recently, like establishing a market specific network in Italy, Lufthansa Italia, buying a stake in American carrier JetBlue Airways and taking over an option on British Midland Airways, giving it the second most number of slots after British Airways at Europe’s busiest airport, London Heathrow.

Lufthansa reports first quarter earnings April 30. In March, the company reported a 14 percent increase in full-year 2008 sales. Profits for the year, however, were lower because of one-time gains booked in 2007.

Late Thursday, Lufthansa also announced Christoph Franz, the current CEO of Lufthansa unit SWISS International Airlines is to become the deputy chairman of the Lufthansa executive board, indicating he could be the successor to Mayrhuber. Mayrhuber was named deputy chairman of Lufthansa’s executive board in 2002 and CEO in June 2003. Mayrhuber’s current contract expires at the end of 2010.

Shares of Lufthansa were down about 1 percent at euro9.55 ($12.41) in Frankfurt afternoon trading.

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