Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on DEUTSCHE LUFTHANSA-REG. We currently have 45 research reports from 1 professional analysts.
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Lufthansa and its pilots have settled the pay dispute, but nothing else
15 Feb 17
The two parties have agreed to the result of the mediation process which translates into a wage increase, in four steps, of 8.7%. In addition, a one-off payment of €30m has been agreed which gives each of the airlines 5,400 pilots another €5,000-6,000. However, the parties involved have not agreed on anything else, i.e. not on a new pension scheme and the early retirement scheme. According to management, the pay deal will cost the carrier some €85m annually and the contract expires at the end of 2019. As the pilots intend to negotiate each open point of discussion separately, they are likely to threaten with new strike action in the not too distant future. Management has reacted by announcing its intention to man 40 new aircraft with pilots who are not part of the Lufthansa contract. It is unclear whether these are new aircraft or whether these will replace old jets.
Superb start into the new year, by Eurowings
09 Feb 17
The number of passengers increased by 13% to 7.88m in January. As demand (+10.5%) increased more strongly than the offer (+9.9%), the SLF was up by 0.4pp to 76.0%. Cargo freight demand (+4.9%) was also up more strongly than the offer (+1.7%) which resulted in a 2.0pp improvement in the FLF to 65.9%. Lufthansa’s legacy airlines (i.e. Lufthansa, SWISS and Austrian) showed single-digit passenger increases with the strongest growth to Middle East/Africa (+6.3%). The consolidated group’s passenger number was up by double-digits as the budget brand (i.e. Eurowings) saw the number rising by 68% to 1.69m. In spite of this, this SLF was down by 0.9pp to 71.2% as the offer was up by 115% while demand increased by ‘only’ 112%. On the other hand, the legacy airlines achieved rising SLFs to all destinations except for the Americas (-1.7pp to 78.7%) with the strongest growth achieved to/from APAC (+4.0% to 84.6%).
December was a good month in volume terms
10 Jan 17
The number of passengers was up by 5.9% to 7.79m in the last month (+1.8% to 109.7m in the full-year). As demand growth (+7.3%) outpaced the offer (+5.4%), the SLF improved by 1.3pp to 77.7%. The respective full-year numbers were +2.8%, +4.6% thus leading to an SLF of 79.1% (-1.4pp). Simultaneously, cargo demand increased by 8.3% while the offer was up by only 3.5% in December, i.e. the FLF improved by 3.1pp to 70.3%. The respective full-year numbers were +1.4% and +1.0% thus leading to an FLF of 66.6% (+0.3pp). The hub airlines’ (i.e. Lufthansa, SWISS, and AUA) traffic to/from APAC was only moderately up (the passenger number increased by 1.3% in December and was down by 2.7% in the full-year), it rose strongly to/from the Middle East/Africa (+10.5% but -1.7%, respectively) and to/from the Americas (+6.2% and +4.1%). Demand growth was slightly more subdued within Europe (+4.8% and +0.5%). The SLFs increased to/from all regions in December and to the Middle East/Africa in the full-year. However, all other destinations experienced falling full-year SLFs. Lufthansa’s budget airline Eurowings attracted a total of 18.43m passengers in 2016 (c. 17% of the total). Compared to 2015, this was an increase of 8.8%. However, Eurowings continued suffering falling SLFs in the last month and in the full-year and on both short- and long-haul flights.
Management continues to sit between two stools
18 Dec 16
The company and the pilots have agreed to a mediation process to solve finally their dispute on pay and pensions. This process is scheduled up to the end of January, i.e. the pilots will not strike during the mediation. On the other hand, the conflict has escalated with Eurowings crew members and their Ufo union. While other Eurowings employees, members of the Verdi union, have settled their dispute earlier this month, this second union has not agreed to these terms. Ufo believes that the Verdi contract is unfavourable. Consequently, Ufo threatens with new strike action.
November was a good month, in volume terms
09 Dec 16
Although Lufthansa suffered from strike action in the last month (as it did in November 2015), the number of passengers increased by 5.9% to 7.63m, which brought the ytd number to 101.9m, an increase of 1.6%. As demand increased by 10.1% while the offer was up by ‘only’ 9.3%, last month’s SLF improved by 0.5pp to 75.8%. The respective ytd numbers were +2.5%, +4.5%, and -1.6pp to 79.2%. However, management continues to complain about ‘significantly falling’ yields on a currency-adjusted basis. The development was similar in the Logistics division. Demand was up by 2.8% while the offer was increased by only 0.4%. As a result, the November FLF improved by 1.7pp to 71.0%. The ytd FLF was unchanged at 66.2% as both demand and offer were up by 0.8%. Lufthansa’s November SLFs improved to/from European and Middle Eastern/African destinations but fell to/from the Americas and APAC and for the first eleven months it was only up to/from the Middle East/Africa.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced
N+1 Singer - Carpetright - Recovery has just begun
17 Feb 17
With UK LFLs up 6.8% in Jan against tough comparatives, and Europe LFLs up 5.4% in Q3, the first clear evidence is now visible that the transformation strategy is gaining momentum. Given some uncertainties, market forecasts are yet to reflect this, but upgrades seem likely as further initiatives are rolled out. Despite a recent bounce from its all time low, the valuation is still very low on consensus assumptions, where risk now appears to be shifting to the upside. With scope for re-rating too, our 300p target price has the scope to grow to 500p over 18 months. We re-initiate with a Buy.
New Screen – Consistent Growth + “11 with legs”
17 Dec 15
To represent the theme of “Consistent Growth”, we introduce our second basket of small-cap stocks selected by a screening process. This will sit alongside our first (deep value) basket introduced and described in our note dated 26th May 2015 (Our first screen – 10 deep value stocks to consider). The screening criteria address both the extent AND the quality of growth in EPS and sales, which we consider add a worthwhile additional element to stock selection. The process results in a basket of 25 stocks, the performance of which we will track over time, allowing comparison of investment styles, but also highlighting interesting companies. We have taken a closer look at 11 stocks “11 with legs” (see list on the right) in this screen.