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Further downturn at LuxairGroup in 2012
Economics

Further downturn at LuxairGroup in 2012

2 min. 30.05.2013 From our online archive
Despite a largely positive performance in the passenger transport sector of LuxairGroup, the company saw a loss of 10.5 million euros in 2012, with a cautious outlook for this year.

(CS) Despite a largely positive performance in the passenger transport sector of LuxairGroup, the company saw a loss of 10.5 million euros in 2012, with a cautious outlook for this year.

Passenger numbers at Luxair saw a 7 percent rise last year, with 804,198 passengers making up a 60.7 percent occupancy rate, up from 58.2 percent in 2011.

However, with rising costs, mainly due to a 10 percent rise in the price of oil, and a fall in revenue due to the increase in sales of the so-called Primo tickets, offering cheaper prices at less flexibility, the airline recorded a loss approaching 20 million euros in 2012.

The Group's cash cow, LuxairTours, also saw more difficult times last year. Here, too, passenger numbers increased, but the overall occupancy rate sank, with political instability in North Africa and the effects of the economic crisis in Southern Europe calling for greater flexibility at the holiday provider.

Trouble in the freight handling sector

Still, the rising passenger numbers had a positive effect on LuxairServices. For example, catering was up by 14 percent in 2012 compared to the year before.

A total of 1.9 million passengers travelled via Findel last year.

On the freight handling end of the business, a difficult economic climate left its mark. Last year, the volume of goods handled by LuxairCargo decreased by 40,000 tonnes to a total of 638,000 tonnes, producing an operating loss.

Additionally, trouble at Cargolux, in which LuxairGroup owns a 43.4 percent stake, had a negative effect on the group's financial year 2012.

Therefore, even though overall revenue increased by around 18 million euros to 446.7 million euros in 2012, the net result comes out at a loss of 10.5 million euros, compared to a 3.6 million euro profit in 2011.

Cautious outlook for 2013

For the current year, LuxairGroup has issued a cautious outlook, due to increased competition on a number of Luxair routes, such as Barcelona and Milan, and an anticipated further decrease in the freight business.

Additionally, the group is still caught up in complicated collective bargaining agreement negotiations with Luxembourg's labour unions.

For airline actitivies alone, yearly earnings need to be raised by some 25 million euros to ensure financial balance, a strategic paper by external consultant Roland Berger found earlier this year.

A rise in revenue as well as savings are meant to deliver these results.