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Analysis before buying or selling Lufthansa shares

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You are no doubt familiar with the names and fame of the major European and even international airlines, and perhaps you are considering betting on their stock market shares. In that case, the Lufthansa share, which we will be presenting in more detail today, might catch your attention. Whether you want to buy and sell it online or hold it in your stock portfolio, here are some datas for a good live analysis of its price.

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Lufthansa's revenue and market capitalization

06/12/2021 - 08h55

The German Lufthansa Group is one of the companies that were strongly affected by the adverse effects of the coronavirus pandemic in 2020. This logically led to a drop in the company's business over the year.

Elements to consider before selling or buying Lufthansa shares

Analysis N°1

Lufthansa's takeovers and acquisitions of smaller airlines will need to be carefully scrutinised.

Analysis N°2

Lufthansa's strategy to further develop in emerging countries will also be followed, in particular by developing its offerings for high-end customers in these markets.

Analysis N°3

Generally speaking, any changes in the services offered by Lufthansa to its users with the aim of improving their experience and therefore moving up the range should be followed.

Analysis N°4

We will of course follow all the data coming from the competition in this sector of activity. Indeed, given the highly competitive aspect of this sector, publications and announcements from the main players in this field can have an influence on the share price.

Analysis N°5

We will also follow the development of low-cost airlines, which of course affect the passenger volume of the other major airlines.

Analysis N°6

Finally, an eye will also be kept on oil prices as well as on labour costs and government regulations that may affect the group's margins.

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General presentation of Lufthansa

In order to invest in the Lufthansa share price online and to carry out relevant analyses of the share price, it is of course necessary to have a thorough knowledge of this company as well as its activities and the segments in which it operates. This is precisely what we propose to do now with a complete presentation of this company.

Deutsche Lufthansa AG is a German company that specialises in air transport. More precisely, this company is one of the most important airlines in the world today.

To understand the activities of the Lufthansa Group, however, they can be divided into different divisions according to the share of turnover they generate, as follows:

  • First of all, the major part of the Lufthansa Group's revenues comes from the air transport business with more than 72.5% of the total turnover. The company carried more than 145.2 million passengers in 2019.
  • Maintenance and rental services account for the next largest part of the company's turnover, with repair, maintenance and rental services for aircraft, machinery and equipment.
  • The various catering services on board the company's aircraft generate 7.2% of its turnover.
  • Finally, logistics services account for 6.7% of the group's turnover.
  • The remaining 1.5% of turnover comes from a number of ancillary activities.

The Lufthansa group currently has a fleet of 763 aircraft, of which 364 belong to German Airlines, 19 to Eurowings, 107 to Swiss, 82 to Austrian Airlines and 19 to Brussels Airlines and Lufthansa Cargo.

Geographically, the group currently generates 60.5% of its turnover in Europe, 19.9% in North America, 12.3% in Asia Pacific, 3% in Central and South America, 2.5% in the Middle East and 1.8% in Africa.

Analysis before buying or selling Lufthansa shares
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The major competitors of Lufthansa

We will now take a closer look at Lufthansa Group's main competitors in the industry with the major players and details of their activities:

British Airways

This UK national airline offers domestic and international flights from its main hub at London Heathrow Airport. It is currently the third largest European airline after Air France KLM and Lufthansa and has created Oneworld. It was also the first airline to generate more than US$1 billion on a single route in one year between 1 April 2017 and 31 March 2018 between New York JFK and London Heathrow.

Air France KLM

This company is a Franco-Dutch alliance which includes the main airlines Air France and KLM as well as 6 other subsidiary airlines. It is organised around a holding company in which the French state is the main shareholder with 14.3% and the Dutch state with 14%. Its main activities include passenger air transport, air freight transport, aircraft maintenance and services.

American Airlines

The group's competitors also include American Airlines, which operates both domestic and international flights through a number of US-based hubs. It is now the world's largest airline and, through its regional subsidiary American Eagle, serves over 350 destinations in more than 50 countries and territories with more than 6,700 flights per day. American Airlines is controlled by AMR Corporation and is headquartered in Fort Worth, Texas, USA, and is a founding member of the Oneworld alliance. The company merged with US Airways in 2013 to become the world's largest airline.

The Airways International Public Company Limited

This airline is a national Thai airline that operates domestic and international flights on four continents from its main hub at Bangkok airport. The airline is a member of the Star Alliance and is headquartered in Bangkok.

Cathay Pacific

The last major competitor to Lufthansa is Cathay Pacific, a Hong Kong-based airline that flies to over 200 destinations in Asia, North America, Australia, Europe and Africa from its hub at Hong Kong International Airport. Currently, the airline is considered to be one of the world's best airlines and was voted Airline of the Year in 2003, 2005, 2009 and 2014. The group has also been awarded a 5-star Skytrax rating. It is also a founding member of the Oneworld alliance like American Airlines and British Airways.


The major partners of Lufthansa

Lufthansa is a partner of the car rental company Hertz. Members of the Lufthansa loyalty programme can earn points for every rental with Hertz.

Star Alliance

Since 2009, Air Canada and Lufthansa, partners in the Star Alliance, have been sharing their airline codes, allowing the Canadian airline to offer flights to passengers based in the provinces to travel to Canada.

Oman Air

In 2017, Oman Air announced the signing of an interline agreement with Lufthansa covering more than 50 destinations in Europe and North America. In return, Lufthansa will put its codes on Oman Air flights from Germany.

United Airlines

The same year, in April 2017, the German airline group Lufthansa and its American competitor United Airlines announced Wednesday the creation of a joint venture in the transport of goods between the United States and Europe.

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Positive factors for Lufthansa shares
The factors in favour of a rise in the Lufthansa share price:

First of all, the Lufthansa Group's position in its sector is of course one of its main strengths, as it is one of the world's leaders in this sector, which gives it a strong brand image and increased negotiating power. Lufthansa stands out in particular because it is one of the leading providers of IT services in the fields of aviation, maintenance and in-flight catering services.

The Lufthansa group is one of the founding members of the Star Alliance and is even one of its most important members. This contributes to the attractiveness of this stock for investors and can therefore help to increase its share price. The company's very positive brand image is also due to the fact that it is often associated with German engineering as a guarantee of quality and performance.

Of course, we can also talk here about the workforce of the Lufthansa Group with more than 100,000 employees worldwide. This enables it to operate in more than 80 different countries and to serve no fewer than 200 different destinations. The Lufthansa Group is also active worldwide in freight forwarding and logistics. It is particularly active in this area and thus generates additional revenues to those from passenger transport.

Finally, the group's marketing strategy is another of its strengths. Indeed, Lufthansa's brand awareness is very strong worldwide thanks to recurrent sponsoring operations and the marketing efforts made, but also thanks to an offer focused on exclusive services for its customers such as lounges, loyalty programmes and other premium services for business and first class travellers.

Negative factors for Lufthansa shares
The factors in favour of a drop in the Lufthansa share price:

First of all, although Lufthansa's reputation is rather strong throughout the world, its brand image may have been damaged in the past due to some serious incidents on aircraft in its fleet and a few accidents.

On the other hand, the fact that the business sector in which Lufthansa operates is a particularly competitive one. However, this strong competition limits the group's opportunities for growth in market share.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Which subsidiaries are currently owned by Lufthansa?

At present, the Lufthansa Group owns several subsidiaries around the world. The complete list is as follows: The airline owns and operates Air Dolomiti, Austrian Airlines, Austrian Arrowq, Brussels Airlines, Edelweiss Air, Eurowings, Germanwings, Lufthansa Cargo, Lufthansa CityLine, Lufthansa Regional and Swiss. The group also owns 50% of the capital of SunExpress. These various entities make Lufthansa a large group with a strong international presence.

How can you anticipate changes in the Lufhtansa share price?

To find out how the Lufthansa share price will develop over the next few hours, days, weeks, months or years, you can use a number of analytical methods that we have discussed in this article. Ideally, you should carry out a technical analysis of the stock by studying the graphic signals as well as a fundamental analysis, this time based on a study of the major news and publications.

Is it possible to bet on a fall in the Lufthansa share price?

While it is of course possible to buy Lufthansa shares or trade on the price of that security at the time of purchase, you can also bet directly on the decline in that security by using CFD contracts or contracts for difference. These contracts can only be accessed online from the trading platforms of market brokers.

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