Lufthansa’s 2011 Gains Narrow Air France Lead as European No. 1

Lufthansa’s 2011 Gains Narrow Air France Lead
A Lufthansa tail fin is seen at Heathrow airport in London. Photographer: Simon Dawson/Bloomberg

Deutsche Lufthansa AG said passenger traffic rose 7 percent in 2011, shrinking Air France-KLM Group’s lead as Europe’s biggest airline.

Lufthansa’s traffic, calculated by multiplying the number of passengers carried by the distance flown and the measure by which airlines are usually ranked, grew to 208 billion revenue passenger kilometers last year, it said in a statement today.

That’s 5 percent lower than Air France-KLM’s 2011 total of almost 219 billion, based on the sum of monthly figures -- narrower than the 11 percent gap in 2010. IAG, parent of British Airways and Iberia, ranks third in Europe with 169 billion.

“From a balance sheet and management perspective Lufthansa tend to be the stronger, and they also have a diversified portfolio,” said Stephen Furlong, a Davy Stockbrokers analyst in Dublin who has a “neutral” rating on all three carriers.

Cologne, Germany-based Lufthansa transported a record 106 million passengers in the year, up 7.5 percent from 2010. Air France-KLM and International Consolidated Airlines Group SA attracted 76 million and 51.7 million travelers respectively.

Lufthansa Passenger Airlines, which includes the namesake brand and discount division Germanwings, moved 11 percent more passengers, while the Swiss and Austrian Airlines units carried 8 percent and 3.4 percent more. U.K.-based operator BMI, which is being sold to IAG, attracted 7.4 percent fewer customers.

Lufthansa increased capacity 9.8 percent during the year, outpacing traffic growth, so that the load factor, a measure of seat occupancy, shrank 2 percentage points to 77.2 percent. IAG added 7.1 percent more seats, versus a 7.2 percent traffic gain, lifting occupancy 0.1 points to 79.1 percent, it said Jan. 5.

Air France-KLM’s capacity advanced 7.3 percent, including the consolidation of Dutch operation Martinair in November, Bloomberg calculations show.

“They all have to do more on the capacity front,” Davy’s Furlong said.

Lufthansa said in October it would cut capacity growth for 2012 to 3 percent from a planned 9 percent. It will take 32 new planes and retire 38, include nine intercontinental jets.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE