Air Transport World

EUROPE REPORT.(airlines)

Air France Chairman Jean-Cyril Spinetta told the Paris business daily Les Echos that Air France expects to post net earnings of about Ff1.7 billion ($285 million) for the year ended March 31.

Separately, the French government outlined further plans to move AF further into the private sector. Mound 20% of the airline's capital will be floated on the stock market, with employees offered up to 15% of these shares. Government is proposing an exchange of shares for salary cuts for pilots. At the end of this process, 67% of AF's capital will belong to the state, compared with the current 94%.

Lufthansa Group is calling 1997 its most successful year, with provisional figures showing an increase in pretax profit at the Group level of nearly Dm1 billion compared with 1996, to Dm1.6 billion ($873 million). After-tax profits, after a 1time charge of Dm700 million for deferred taxes, increased more than 45% to Dm800 million. Led by Lufthansa Airlines performance, Group revenues rose by 11% to Dm23 billion.

Lufthansa's supervisory board continues to evaluate closely the launching of a cost-saving subsidiary carrier, code-named Lufthansa Light. A decision is expected by summer. A preliminary feasibility study did not identify "adequate attainable business improvements," an official said.

The planned airline, with 6-14 aircraft at the outset, would serve routes such as Berlin-Stuttgart or Hamburg-Paris, and skirt primary hubs Frankfurt and Munich. Emphasis would be on IH's heavily loss-making domestic network, long the Achilles' heel of LH's operations. …

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