Lufthansa ! LH ! DLH !

Lufthansa has selected the CFM International CFM56-5B engine for the 21 Airbus A320 and two A321 aircraft it ordered in September.

The deal is valued at approximately $300 million at list price. The new aircraft are scheduled for delivery between 2013 and late 2014, and will be operated by Lufthansa as well as Swiss International.

Lufthansa's existing A321 fleet is powered by the International Aero Engines (IAE) V2500, but Swiss A321s are equipped with CFM56s.

Lufthansa has unveiled a new passenger seat and inflight service concept, which are to be rolled out across its short and medium-haul fleet over the next 12 months.

The German flag carrier aims to "square the circle" in reducing the seat pitch to install more seats and create additional capacity while, at the same time, improving passenger comfort. More space in the knee area, dubbed "living space", was partly created by moving up the literature pocket from the lower end of the back rest to a position above the tray table.

The other main change is that the manufacturer Recaro replaced almost all seat padding foam with an elastic, polyester-based netting material underneath the leather cover. Foam is merely used to pad and slightly raise the edges of the sitting area and back rest along the aluminium structure. This has led to a much slimmer back rest and apparently more seat comfort.

Lufthansa claims that the elastic diaphragm not only accommodates the individual body shape of passengers better - the seat ergonomics have been developed in cooperation with the Technical University Munich - but also it does not wear out like conventional foam. Stress tests suggest that the mesh should retain its tension throughout the seat's entire lifecycle of six to seven years.

While the average seat pitch has been reduced from 32in to 30in, passengers will gain 1.6in (4cm) more legroom at knee level as a net effect of the BL3520 seat. This allows the installation of up to two additional seat rows per aircraft. For example, an Airbus A320 will be able to accommodate 168 passengers instead of the current 150. The airline's total capacity is to grow by more than 2,000 seats or around 8%, equivalent to 12 additional A320s.

Lufthansa has ordered 32,000 seats for installation on 181 A319, A320, A321 and Boeing 737-300/500 aircraft by the end of 2011; eight new A320-family aircraft are to be delivered with the future interior in 2012. The retrofit programme will cost approximately €170 million ($225 million), including other upgrades such as LED lighting, cosmetic cabin changes and new, more voluminous overhead bins for the 737s.

A further 6,000 seats have been ordered for Austrian Airlines, Brussels Airlines and Swiss International Air Lines subsidiaries. Whether BMI will also install the BL3520 seat has not yet been decided, says Lufthansa.

Lufthansa Group incurred a first-quarter net loss of €507 million ($752.6 million), widened 70.1% from a €298 million net deficit in the year-ago quarter. LH said the loss is not as steep as it appears since it includes a €300 million charge associated with a change in the value of fuel hedge options.

CFO Stephan Gemkow characterized the charge as "purely an accounting effect," adding that the "hedging options are taking a lot of pressure off our operating result." First-quarter revenue lifted 11.8% year-over-year to €6.4 billion and operating loss was €227 million, narrowed from an operating deficit of €330 million in the year-ago period.

Lufthansa Passenger Airlines posted a first-quarter operating loss of €234 million, LH Group said in a preliminary earnings release. Swiss International Air Lines earned a first-quarter operating profit of €17 million, Austrian Airlines incurred an operating loss of €64 million, bmi reported a €63 million operating deficit and Germanwings suffered an operating loss of €44 million.

"In addition to the effects of the catastrophes in Japan and the political unrest in North Africa, [LH Group's negative first-quarter] result can also be attributed to the rise in oil prices during the past months and the burdens brought about by the severe winter," the company stated. "Although the business segment was able to record an increase in sales, the given circumstances meant that it was unable to fully sell the expanded offer, generated mainly by the modernization of the fleet. Nonetheless, the Passenger Airline Group did achieve a significant reduction of its unit costs."

Lufthansa Italia to shut down at end of October
By: Kurt Hofmann
Lufthansa said it will shut down Italian subsidiary Lufthansa Italia and change its focus in Italy to bringing passengers to LH's major European hubs. "Given the slump in prices on European routes and the competition, it was extremely difficult to establish a profitable European network under a separate brand," stated LH Chairman and CEO Christoph Franz. "It therefore makes sense to focus the Lufthansa Group's offering on connecting the Italian market to the group's hubs."

The brand will exist until the end of October. Its eight Airbus A319s will then be integrated within the LH Group. LH established the Italian subsidiary in spring 2009 after Alitalia significantly shrank, but LH Italia never made a profit, insiders told ATW.

LH Italia operates to London, Paris and on Italian domestic routes. LH regional subsidiary Air Dolomiti will extend its network, especially between Italy and Germany, to compensate for LH Italia's demise.

LH Executive Board Member Carsten Spohr commented, "We are the most successful foreign airline in Italy and we want to consolidate our position. By shifting capacities from Lufthansa Italia to our core brand Lufthansa and strengthening Air Dolomiti, we will be able to offer our customers an even higher quality network of services via our hubs."