Summary of Lufthansa Investor Conference Call Company Overview - **Company**: Lufthansa Group, the largest airline group in Europe and fourth largest globally after major U.S. carriers [3][2] - **Revenue**: Generated €38 billion in revenue with 130 million passengers transported [3][2] - **Employee Count**: Approximately 100,000 employees [3][2] - **Business Structure**: Operates under four main pillars: hub airlines, point-to-point airlines, logistics (air freight), and MRO (maintenance, repair, overhaul) [4][5] Key Business Segments MRO Division (Lufthansa Technik) - **Revenue**: €7 billion, with two-thirds from external third-party revenues [5][6] - **Market Position**: Largest independent MRO player, managing 5,000 aircraft under contract, representing 20% of all commercial aircraft globally [6][5] - **Growth Strategy**: Ambition 2030 program aims for €10 billion in revenue and a 10% EBIT margin by 2030 through geographic expansion, digitization, and diversification into defense [6][7] Air Freight Division (Lufthansa Cargo) - **Market Position**: Positioned as a key player in European air freight, with a unique hub in Frankfurt [9][8] - **Fleet**: Operates 22 freighter aircraft, allowing flexibility in operations [9][8] - **Long-term Contracts**: Entering into long-term contracts with Chinese e-commerce players, enhancing stability [9][8] Passenger Airlines - **Market Strategy**: Focus on being a value carrier rather than a low-cost player, with strong market positions in leisure travel [10][11] - **Integration**: Enhanced connectivity through a multi-hub system, allowing for efficient passenger routing [12][14] - **Fleet Renewal**: Currently lagging behind peers with 20% new generation aircraft, aiming for 60%-65% by 2030 [16][17] Financial Performance - **Q3 Results**: EBIT roughly on par with last year, despite ongoing cost inflation of +11% [20][21] - **Cost Management**: Successful reduction of irregularity costs by one-third in the first nine months of the year [20][19] - **Future Outlook**: Anticipates adjusted EBIT significantly above last year, with a disciplined capacity growth of 4% focusing on intercontinental routes [23][24] Midterm Targets (2028-2030) - **EBIT Margin**: Targeting an adjusted EBIT margin of 8%-10% [25][24] - **ROIC**: Aiming for a 5%-20% adjusted return on invested capital [25][24] - **Free Cash Flow**: Projecting €2.5 billion of adjusted free cash flow [25][24] Strategic Initiatives - **ITA Acquisition**: Currently holds a 41% stake in ITA, with plans to increase to 90% or 100% depending on synergies and financial KPIs [27][26] - **Synergies**: Expected synergies of 10%-15% of ITA revenues, with significant integration already underway [28][27] - **Premiumization Initiatives**: New product offerings expected to yield 15% higher revenues and increased ancillary revenues through enhanced customer experience [31][30] Challenges and Risks - **Labor Relations**: Ongoing discussions with unions regarding capacity shifts and potential strikes [35][34] - **Fuel Hedging**: Implementing a hedging strategy to manage fuel price volatility, targeting an 85% hedge ratio [36][35] - **Pension Negotiations**: Ongoing discussions regarding pension increases for mainline pilots, with limited strike support [38][37] Conclusion - Lufthansa Group is strategically positioned for growth with a focus on operational efficiency, fleet modernization, and market leadership in key segments. The company is navigating challenges in labor relations and cost inflation while maintaining a positive outlook for future performance and shareholder value creation.

Core Insights - Cathay Pacific Group has officially received and launched a new Airbus A320neo full-flight simulator manufactured by CAE, enhancing its pilot training facilities and supporting fleet modernization and safety commitments [1][3] - The new simulator features CAE's advanced Prodigy visual system, significantly improving training efficiency and realism, addressing the growing demand for pilot training [1] - Cathay Pacific is implementing a comprehensive investment plan exceeding HKD 100 billion, which includes fleet renewal, cabin product upgrades, lounge renovations, and digital innovations, with orders for over 100 new aircraft [3] Group 1 - The new Airbus A320neo CAE 7000XR full-flight simulator will primarily be used to meet the increasing pilot training needs of Cathay Pacific Group [1] - Cathay Pacific has a long-standing partnership with CAE, focusing on safety and operations, and has continuously introduced CAE-manufactured training equipment at its Hong Kong training center [1] - The investment plan includes the acquisition of over 30 A320neo and A321neo aircraft, contributing to a fleet of more than 230 passenger and cargo aircraft [3] Group 2 - The ceremony for the simulator's unveiling was attended by key figures from Cathay Pacific and CAE, marking an important milestone in their collaboration [1] - Cathay Pacific currently operates 16 A321neo aircraft, while Hong Kong Express Airlines has a fleet of over 40 aircraft, all consisting of Airbus models [3] - The investment plan encompasses various areas, including fleet updates and digital innovations, indicating a strategic focus on modernization and enhanced customer experience [3]

Core Viewpoint - HNA Group announced the introduction of one A321NEO aircraft and the retirement of one B737-800 aircraft by September 2025, resulting in a total fleet of 354 aircraft by the end of September 2025 [1] Operational Performance - Passenger capacity (measured in available seat kilometers) increased by 5.84% year-on-year as of September 2025 [1] - Revenue passenger kilometers grew by 7.04% year-on-year [1] - Passenger traffic volume rose by 2.53% year-on-year [1] - Load factor improved by 0.96 percentage points [1] Cargo Performance - Cargo and mail revenue ton kilometers increased by 23.42% year-on-year [1] - Cargo and mail volume grew by 15.96% year-on-year [1] - Cargo and mail load factor improved by 10.72 percentage points [1] New Routes - New route from Chongqing to Haikou to Auckland launched on September 13, operating two flights per week [1] - New route from Changchun to Haikou to Singapore launched on September 21, operating four flights per week [1] - New route from Haikou to Jakarta launched on September 26, operating four flights per week [1]

Core Viewpoint - Cathay Pacific has placed an order for 14 Boeing 777-9 aircraft, valued at approximately $8.1 billion, marking its first purchase from Boeing in 12 years, aimed at modernizing its fleet and meeting increased capacity demands at Hong Kong International Airport [1][2]. Group 1: Aircraft Order and Fleet Modernization - The new order will help replace Cathay Pacific's aging Boeing 777 fleet and increase its total orders for the Boeing 777X series to 35 aircraft, making it the third-largest customer for this model globally [1][2]. - Cathay Pacific had previously expressed interest in acquiring 21 Boeing 777-9X aircraft in December 2013, with initial delivery expected between 2021 and 2024, but delays in development have pushed the timeline to 2027 [1][2]. Group 2: Market and Financial Implications - Following the announcement of the aircraft purchase, Cathay Pacific's stock price fell over 10% on August 6, closing at HKD 10.85, a decline of 9.66% [3][5]. - Morgan Stanley has revised its profit forecasts for Cathay Pacific downwards for 2025 to 2027, reflecting a 12.3% drop in passenger yield in the first half of 2025, despite strong demand for business class [4]. - JPMorgan Chase downgraded Cathay Pacific's stock rating from "neutral" to "underweight," setting a target price of HKD 8.2, while the company anticipates a decrease in ticket prices in the second half of the year due to increased capacity [5].