Air Transport World

Charters key recession recovery for West Germany's Hapag-Lloyd.

Hannover--West German charter airline Hapag-Lloyd Flug turned the profit corner in 1983, had "a very good year" in 1984, and expects to end 1985 with a profit too, although probably not as good as 1984's. When ATW visited the carrier here recently, its bookings for the tourist season were running at 98-99% of capacity. Its technical work for third parties was also producing nicely, especially its recently activated aircraft storage program.

Like other charter carriers, Hapag-Lloyd was hit by the world's economic woes at the start of this decade. The recession put a damper on German tourism; the market was flat from 1980 to 1982, although it has been expanding since then. The periodic forays of the scheduled airlines into charter operation and their various discounted fares on scheduled flights squeezed the independents. And in a business where almost all revenues come in local currencies and many major expenses are billed in dollars--40% in Hapag's case--the strong dollar has hurt.

Aided by the economic recovery, more aggressive marketing and strict cost control, the airline earned a 26.4 million deutschemark net profit on gross revenues of DM 486 million in 1984. Managing Director Claus Wulfers expects to gross DM 520 million in 1985. The net will probably be down from the previous year since 1984's income was augmented by the sale of engine spares. The airline carried 1.77 million passengers and flew 2.048 billion passenger-miles last year. Its fleet accounted for 12,209 takeoffs and burned 182 million liters of fuel.

A300 freighter

Most of Hapag's income comes from its passenger charter operations and most of that--70%--from its summer flights. Midweek demand had been light but a strong marketing effort has strengthened it. During the off-season, otherwise idle aircraft are leased out--wet, dry or however the lessee desires. Recent lessees have been Kuwait Airways, Tunis Air, Air Jamaica, Egyptair, JAT, Air Djibouti, Air Malawi and Capitol. When no taker could be found for an Airbus A300, the craft was operated by Hapag-Lloyd as a frieghter from February 1981 to March 1983 and from November 1983 to April 1984. It flew 80 flights over the North Atlantic--the first twin-engine aircraft to make the trip commercially under the 90-minute rule. …

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