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Edited Transcript of LHA.DE earnings conference call or presentation 19-Mar-20 9:00am GMT

Q4 2019 Deutsche Lufthansa AG Earnings Press Conference

Frankfurt / Main Apr 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Deutsche Lufthansa AG earnings conference call or presentation Thursday, March 19, 2020 at 9:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Andreas Bartels

Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications

* Carsten Spohr

Deutsche Lufthansa AG - Chairman of the Executive Board & CEO

* Ulrik Svensson

Deutsche Lufthansa AG - CFO & Member of Executive Board

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Presentation

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [1]

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Good morning, ladies and gentlemen. Let me welcome you most sincerely from Frankfurt to our annual press conference. In extraordinary times, our press conference, as you can imagine, won't take place as originally planned. For clear reasons, we redesigned it to be a video program. Together with our CEO, Carsten Spohr, I welcome you most sincerely. And from Stockholm, our finance Board member, Ulrik Svensson is also connected by video. You can already upload your questions and ask them. And later from Stockholm, respectively, Frankfurt, we'll answer them.

Last clue from my side, the video conference will be held in German and English language. You can choose the language you need. Ulrik Svensson will present in English, Mr. Spohr in German. And your questions, you can ask, both in English or in German.

Let me leave it at this. Mr. Spohr, the floor is yours.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [2]

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[Interpreted] Well, thank you very much, ladies and gentlemen. Let me also welcome you most sincerely from Frankfurt. We had planned this day differently in many ways, and the entire Board of management is located separately. Therefore, we present from 2 different locations.

Our company, after 30 years' experience, is now in an exceptional situation, as I daresay. The extraordinary circumstances are also symbolized very clearly by this faded-in picture. It shows 8 Lufthansa jumbos on the small airport of Barbados. They are waiting there to evacuate German citizens, mostly cruise-aid passengers whom we want to take back into our home country. 8 Lufthansa long-distance aircraft in 1 airport somewhere in the world outside Frankfurt and Munich that didn't even happen after 9/11.

For some weeks, we have experienced here in our company that hardly anyone wants to fly anymore. And for a few days now, hardly anyone may fly.

In all these phases, the health of our employees, our guests, and of course, our customers throughout the world have supreme priority. And as in all other companies, we have undertaken intensive preparations to protect ourselves as well as possible from corona. And on behalf of our employees, of course, uncertainty is spreading everywhere, also amongst the employees who are concerned about their families and themselves. And therefore, because all of us have come to the finding that world in our industry will be different after the crisis, especially if you see what happened in the past 36 hours where the American Airlines are supported by USD 50 billion, and nationalizations amongst our competitors have taken place. We assume already now that the crisis will influence Lufthansa structurally and also in a sustained way. But despite the dramatic repercussions of the corona crisis, we don't lose our optimism because we are convinced that we are well prepared and we have experience in crisis management. Just recall the terrible Germanwings accident 5 years ago, and without the loss of lives, the Ashes crisis 10 years ago. And we know from that time that active crisis management and communication are the key factors in such crises to live through them successfully.

Now what are we focusing on at the moment? Well, in operational terms on the safety, security and health of our employees and passengers and we'll further reduce our schedule on a daily note. Second, structurally, we'll focus on liquidity in the months to come. And to keep as many employees as possible onboard for at least 1,000 of them throughout the world. And third, we're also planning for the time after the crisis, which structure will our industry have after the crisis? Which structure and size will the Lufthansa group have after the crisis? And which role will be played by the European part of air traffic in worldwide competition? That will also look different after the crisis. So based on our annual press conference, well, this will be turned into a corona crisis conference in major parts, although we can look back to a successful year.

Our adjusted EBIT amounted to EUR 2 billion despite the strong headwind. That was the third-best result in the history of the Lufthansa. And when I was joining the Board 10 years ago, we wouldn't have even dreamt about such results. Even if the results are only interesting in passing regarding last year, we'll also live up to our reporting duty today. Ulrik Svensson will report from Stockholm following my comments and present and explain the results of the past business year.

I, myself, will only focus on the current developments because the corona crisis is overshadowing everything nowadays. The economic repercussions are not yet fully known, but we know one thing that they will even accompany us when the coronavirus is withdrawing. The crisis hits us hard. And in the next months to come, there will be no normal business development. End of January already, we stopped all flight connections to the Chinese mainland. That was the start of massive shortenings of our flight program. Since then, the situation has enhanced every day, almost even hourly. We have drastically shortened in the meantime more. Our schedules have been reduced faster and more consistently than all our competitors, about which many of them smiled. But now no one is smiling anymore in our industry.

We are also asked by representatives of other industries and by politicians why we reacted so early. And my personal answer to that question is that, if you manage a company like ours, it's about the safety and security of 400,000 people and the safety and security of crews and passengers. And then, of course, against this backdrop, we are more sensitized than elsewhere. Now almost all countries have introduced traveling restrictions, and even the EU has closed its borders. And thus, traveling across the board almost completely ends.

The recommendations of many governments to stay at home and refrain from traveling, many people follow, most of them even. And this is the right thing in the interest of health, although it has dramatic consequences for us. We have no incoming bookings anymore, hardly any ones. Yesterday, Air Dolomiti had stopped its -- ended its operations. From today, Austrian Airlines will not offer regular scheduled flights anymore. And only in close coordination and on behalf of the Austrian government, they will take back the Austrian citizens. The same goes for Brussels. Our subsidiary, Brussels Airlines, had to operate the regular air operations from Saturday for 4 weeks. And in the coming week, Lufthansa CityLine will only operate in Munich, whilst the Munich mainline fleet will stay on ground completely.

The deletions in our network show the exponential development of the corona crisis. With the enhancement of the crisis, we reduced our fleet by 1/3 3 weeks ago. Mid-March, it was already 50%. And currently, we only offer 20% of our planned short- and medium-distance flights and only 10% on the long distances.

With the most recent traveling restrictions of the past days and hours, even this remaining schedule has become obsolete. We thus have to reduce furthermore, and intercontinental flights will also be stopped almost completely. As compared to the originally planned program, only 5% will remain, and 95% will be deleted. This minimal special schedule orients towards the return of German citizens that holds for the operations in Germany and remaining contribution of Swiss for the return of Swiss citizens. We call this return schedule in close coordination with the German government and the governments in our other home countries in order to coordinate everything as well as possible jointly.

Frankfurt, as of next week, will remain to be our only German hub with intercontinental collection, 3 times per week will fly to Chicago, New York and Montreal; 3 times per week to Brazil, São Paulo; once to Bangkok and Tokyo; and 3 times to Africa, Johannesburg. In sum total, these are 3 flights a day. But despite this minimum number of flights, it is enormously important for the critical infrastructure at the airports and German port security.

Eurowings, too, will take part in these pick-up return actions; SWISS in Switzerland, too, as mentioned. And this will also be restricted to a few long-distance flights per week. Our employees keep asking me how long can Lufthansa stand this through. And the only thing I can tell you and also you today, ladies and gentlemen, honestly, is that we'll stay it true longer than other ones because our balance sheet is stronger. Our equity share in our fleets is markedly higher, and the degree of indebtedness is much lower than for most of our competitors. And as long as possible, we'll accept our responsibility and offer this return schedule. Should the situation not improve in the weeks to come, and we don't expect it to improve, we need to talk about the basic supply of flights from a political point of view because from a commercial viewpoint, flying doesn't make sense anymore in such times.

It looks a little bit different in the cargo flights. There, the demand is increasing daily. Our cargo fleet is used in good capacity, and we check the use of passenger aircraft as cargo machines. The transport demand is clearly increased, and we want to make our contribution wherever possible to maintain the delivery chains.

At the end, a few remarks regarding what we do in our company in order to cope with the repercussions of the crisis and tell you how different these actions are. We do not only quickly reduce our capacities, as illustrated, but we also have introduced strict saving measures. Our full focus is on cash flows securing. We checked the temporary closure of further flight operations after those announced yesterday and today. We have a group-wide hiring stopped which has been announced weeks ago with unpaid or earlier leave and other part-time offers. With our unions, we have agreed on behalf of all our companies, wherever it makes sense, to introduce short-hour work. And here, the clear rule holds. The more we need to add to short-hours pay, the more colleagues can stay onboard. In many airlines, there are also thousands of dismissals already or unpaid enforced leave amongst our competitors. And of course, we also need to see that we have too many people onboard. But if we say, nevertheless, that you want to keep all onboard, this is only possible because we are unique when it comes to solidarity, and we'll talk about the unions regarding renunciation and flexibility, trying to find a common solution, enabling us to master this unique, common challenge.

But of course, we cannot only renounce at the side of the employees. Even the Board of management will show solidarity. We have decided yesterday that we'll do with our 20% of our basic salary on Board level. In order to keep liquidity in the company, we'll also suggest to the Annual General Meeting to withhold the dividend for the successful year 2019.

The government, we talk about the repercussions of the crisis intensively in order to mitigate them. This includes action for safeguarding liquidity, especially payment of air traffic taxes and state fees should be postponed; then short-hour work, which we also need; and a pertinent law has been adopted in record time and is now shortly implemented. Then slot waiver is also of high relevance without the 80-20 slot rule in order not to use -- to lose our start in lending rights if we don't use them to the tune of 80% or to take flights just to safeguard our slots. And even the EU air passenger regulation need to be flexibilized in this phase because we cannot even compensate in case of corona-conditioned deletions of flights, and EU Commission made similar statements in this sense.

In order to live through this crisis, alongside with the short-term actions, we also have established structural crisis management for the next months to come. Here, we lay the right track sort of time after the crisis for the entire group.

The Lufthansa Group after the crisis won't return to the old normal status and just continue flying as usual. We want and will use this crisis to tackle strategic opportunities. This will also mean that we will have to tackle unpleasant subject matters and issues. As a matter of principle, we will stay optimistic, nevertheless. Lufthansa has withstood crisis successfully. It's the rock in the sea. We have always stood for stability in turbulent times on behalf of ours -- all our stakeholders. And no matter, whether it's political escalation, terror, pest or nature disasters, our employees have always proven their crisis capability and to safeguard its flight operation and also on the ground and in the management. Therefore, in this special situation, I would like to thank you for your highly professional contribution.

Apart from that, we are also financially positioned better than most of our competitors. And now the years of modernization are paying. We are standing on the solid foundation. Our balance sheet is strong. And unlike in other airlines, we own the very big majority of our fleet. But it's also clear a crisis of such dimension can only be overcome if structural changes and contributions are made by all stakeholders.

Having said this, let me now hand over to Ulrik Svensson in Stockholm. Thank you very much for the time being, and then we'll answer your questions later on the current situation. Thank you for now.

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [3]

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Thank you, Carsten. It goes without saying that the corona crisis is a top focus for group management for the time being. Nevertheless, let me just briefly describe 2019 financials before we go into more of the implications of the corona crisis.

2019 was, by no means, a lost year. We made strategic progress in a number of different areas. Eurowings was a positive note. We did announce a turnaround plan in connection with our Capital Markets Day in June 2019. We saw the first progress already in Q3 last year and continuing into Q4 also 2019. Nevertheless, results in 2019 with EUR 2 billion were lower than in 2018. We were not able to pass on higher fuel costs to our customers. The lower economic growth in our home market affected customer demand, especially among the premium segment. In addition, the logistics business suffered from sharp decline of the global cargo market. On the positive side, we managed to achieve another, for the fourth year in a row, reduction of our CASK, our most important KPI cost per available seat kilometers.

Let me turn to the corona crisis now, which is posting an unprecedented challenge for us and the airline industry. As Carsten alluded to earlier, we are experiencing significant booking declines, especially since the corona outbreak in Italy in February. The implementation of travel bans in U.S. and in many European countries have resulted in further deterioration in the past 7 days. At the same time, cancellations are increasing. In response, we have expanded rebooking options and issued vouchers to our customers for the customers to allow them more flexibility and to reduce cash out related to refunds.

Our response to the crisis has been fast and determined. We have cut our flight plans quicker and more comprehensible than any of our competitors. At this stage, capacity is around 70% below prior year levels. This figure will increase in the next couple of days coming to the implementation of further measures, which Carsten just outlined. Our swift response to the crisis has meant that we were able to successfully protect and safeguard our load factors, this in weeks where the crisis already started to affect demand over last 4, 5 weeks.

However, already since several weeks, we have focused financial management entirely on cash and the preservation of liquidity. Taking out capacity is one of the key levers doing that as quick as possible to get cash out down. When it comes to minimizing cash-outs, we have benefit from our fleet strategy and the fact that we own the vast majority of our fleet. This saves us lease cost and give us operational flexibility. As a consequence, our share of variable cost amounting to around 60% of the group airlines is very high by industry standards. These costs, primarily related to fuel, fees and charges, are eliminated immediately when we are canceling a flight.

However, it is clear that the scale-down of operations will not be enough in the current crisis. We will leave no stone unturned to save all possible costs. Non-variable costs, which we consider just semi-fixed, and from now on account for around 30% of the total airline cost base, leaving aside depreciation as a noncash item. We target to reduce the semi-fixed costs by 1/3. This starts with personnel cost, which amount to around EUR 9 billion on a group-wide basis. We are in the final stages of implementing kurzarbeit, which is, in German, short for short-time work in various parts of the group. The concept allows to work time of employees who are in this group of the kurzarbeit to be reduced by 100%. This is for a maximum of 12 months, and the government compensate employees for a large part of the resulting wage loss.

At Lufthansa, we have already filed the application for the cabin personnel. Preparations for other work groups, in particular, ground staff is in the being. Other group airlines, such as Brussel Airlines and Austria, are in the midst of implementing similar concepts. Many other personnel measures have been taken. This includes the reduction of overtime hours, which have been built up during the expansion of the business over the last couple of years. We are also enforcing unpaid temporary leaves and mandatory holidays. A hiring freeze is also in place. All non-safety relevant trainings are canceled. We have also stopped all marketing activities. Projects in all areas have been radically postponed or canceled, unless they are critical to operations and safety. The same applies to aircraft and engine overhauls and maintenance, which will be shifted to a later date wherever possible. Wet leases are canceled following the overall cut of capacities. We have also started to postpone off-planned investments. The majority of these investments originally forecasted to slightly exceed EUR 3 billion in 2020. This relates to acquisition of aircraft and engines. We're aiming to a drastic reduction of these numbers.

Turning to liquidity. The current liquidity is EUR 4.3 billion. In addition to that, we have unused credit lines of EUR 800 million. This offers us a good protection in the coming weeks and months, even in a scenario where you see large part of our fleet being grounded and new bookings coming to almost a complete stop. However, we will be needing more funds in case of a prolonged de facto shutdown of the whole global aviation industry. Having raised around EUR 600 million in the last weeks already, we are currently in the process of raising more funds. Our high level of fleet ownership put us in a rather unique position when it comes to tapping the credit markets. We own 80% of our fleet, of which almost 90% is unencumbered. This corresponds to a book value of approximately EUR 10 billion, which is possible to pledge to creditors, if necessary.

In light of the exceptional crisis, we have proposed to the AGM to suspend the dividend for 2019. The decision is just another reflection of our absolute focus on preserving liquidity. It ties with my comment in the Capital Markets Day in June when I said that our policy of paying out between 20% and 40% of net income would not apply in times of extreme external shocks. It is our intention to return to attractive payouts as soon as our financial situation allows.

In the current situation, it is impossible to give a more detailed financial outlook than the expectation of a significant reduction of adjusted EBIT in 2020. The extent of the decline would largely depend on the future spread of the coronavirus and how customers and government authorities will respond to it. We will do our utmost to limit cash cost to the absolute minimum to protect our balance sheet and to ensure sufficient financing. And allow me one personal note on that. I was the CFO of SWISS in 2003 at its darkest moments in connection with the SARS crisis. We took drastic measures in connection with that those number of years ago. Coming out of the crisis, however, we have ever at SWISS been one of the most profitable airlines in Europe, of course, also helped by the Lufthansa network and being part of a larger group.

And with that, thank you very much and over to Frankfurt.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [4]

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Yes. Thank you very much, Ulrik. So let's move on to your questions now.

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Questions and Answers

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [1]

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I've already received the first question. Let me repeat that in the live stream, you can upload your questions on-site, and you can ask your questions, both in German or English. The first series of questions comes from Richard Weiss from Bloomberg News. He has 4 questions which I want to read out quickly. Mr. Spohr, what state subsidies you want to ask for? You have already had talks regarding loans from KfW what about the amounts you are aiming at? And fourth, how probable is it for the government to become a shareholder of Lufthansa in the near future once again?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [2]

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[Interpreted] Thank you very much, Mr. Weiss. Well, as I told our employees last week and the public today, we'll care for active support of the state once this becomes necessary. And Mr. Svensson has just pointed to our liquidity of EUR 5.1 billion, and thus, this support is not needed as of now. And of course, we have already talked to the KfW and to all our banks in recent weeks because it's clear that we'll need liquidity, and we have been able to increase this to more than EUR 5 billion.

Second question, from your side on state shareholder, Lufthansa has clearly said that this is not warranted, and this is not the case at this time. Thank you.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [3]

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Thank you very much. Mr. Spohr, the next question also to you from Christian Ebner, Deutsche Presse-Agentur. He asked when will you ask for short-time work? And for how many workers will this hold?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [4]

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[Interpreted] Well, it will take place in different stages for 31,000 employees of the Lufthansa AG. We have already asked for short-time work allowance because the work is not lost to the same extent everywhere. The cargo still has enough work, also in the technical department. But in the days and weeks to come, this may change, too. And to be fair, given our schedule changes on a daily note, the burden on the individual groups of employees within the airline is also changing. If we assume that we only use 5% still, of course, almost everyone loses job. It's only available marginally, apart from the operation center and the dispatch center and the comanagement.

And to illustrate these by figures, as of next week in Frankfurt, we'll offer certain flights on a daily note, still; and in Munich with the CityLine, just 10. So the distribution of short-time work isn't out of the question as of next week. But the question, how to continue with the unions regarding the implementation of the short-time work is another question. We have come closer to the target. But of course, this is also a new dimension for the unions. And the formula, which I've presented, in order not to add even more as employee -- employer, the more can stay, and this is a different question to weigh not only for us, but also for the unions. But I'm optimistic that we'll come to grips with all our occupational groups: cockpit, cabin and the ground personnel through the corresponding talks.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [5]

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Next question to Stockholm, Ulrik Svensson, asked by Oliver Clark, Airfinance Journal.

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time, you will get a very low price, a fire sale in other words?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [6]

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No. We are surely not intending to sell our feet. It is much more efficient and much more cost beneficial to continue the model we have done so successfully in the past. We use the owned aircraft as collateral with much more beneficial conditions from the banks. And this is something, of course, we have been working on for many years, and there will be some further work on that going forward. So no. The answer is no.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [7]

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Thank you, Ulrik. Question to Mr. Spohr again related to the Lufthansa cargo. It was asked by [Johann Remaud] from the Frankfurter Allgemeine Zeitung. Mr. [Remaud] asked after the cargo capacity, it shall be used to fold capacity and even extend it. Question: In times of corona, do you have enough personnel for this purpose? Second, what about the 700 aircraft? Where will they be placed? And how many of them in Frankfurt that relates to the entire fleet? And third question, what about the placed-away aircraft, can those be fully replaced by the aircraft carriers?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [8]

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[Interpreted] Well, depending on how this problem will continue, we'll certainly go with more aircraft into cargo or we'll use the instance of external service providers. Of course, we will come to grips through the worldwide resources wherever the cargo service is needed.

Of course, the 700 aircraft cannot just be positioned somewhere. There's hardly any space on our home airports, and we'll have to cordon-off start and lending runways to park some of our aircraft there, also connected to the taxiways but will still fly to Schönefeld and other airports because the space here is not enough. And Frankfurt is a very expensive parking lot. And the aircraft -- the airport in Düsseldorf in Zurich will also be used. For that, we have a few more days because if the schedule is reduced, you do not take out the aircraft off the system straightaway. So the question is how many will be maintained for a start? How many have to be parked immediately? But according to plan, we can place aircraft everywhere in Europe in order not to take them to intercontinental airports.

Now cargo. Cargo carriers, what does that mean? Well, half of the cargo is in the cargo aircraft of the cargo, the others in the bellies of the passenger aircraft, of which we have 150. So in mathematic terms, we would need all 150 passenger carriers to cope with the same amount of cargo, which is not realistic. But Airbus 330, 350 and 778 can be used to the tune of 40, 60 tonnes each, which can only transport cargo in the bellies. And soon as they are available, we'll certainly carry cargo for that purpose, but not with the entire fleet, which would not be justified in terms of demand and in terms of costs incurred.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [9]

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Thank you. Next question from (inaudible). He asked about Lufthansa technology, Lufthansa Technik, asking what about the work at the locations of Lufthansa Technik, will it be maintained?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [10]

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[Interpreted] Well, the Lufthansa Technik , there is still enough work. We rather have the problem due to corona, and quarantine actions becomes more difficult to do shift planning which enables us to protect the health of our employees and cope with the occurring work. We rather have the concern which are still able to pay the bill worldwide, and this is not the same each and everywhere. So we have to see how and which customers are confronted with the crisis and who will still be payable even in the future to pay for cargo transportation.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [11]

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Now (inaudible) from IFP. I ask Ulrik Svensson because it affects the finance. First, how long can Lufthansa cope with the corona crisis according to the present status? Second, what portion of the cost can be avoided by capacity reduction? How much are fixed costs? And third question, do you now directly and consistently demand help from the side of the government? And how much money do you want, if so?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [12]

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How long can we so to say continue? I think the question is put in a bit in a different and maybe even the wrong way. We are having 3 different, very important measures. We spoke about the cost reductions we're doing, which we are reducing cash out very dramatically. Secondly, we have one of the largest unencumbered fleet in the whole world to be able to go to the banks as collateral. And thirdly, there have been very strong statements from the German government that they will help with the liquidity in case there will be liquidity problems for German corporate life. So I think that will take care that Lufthansa will for sure be continuing after the corona crisis and actually be a winner.

In terms of which costs can reduce immediately. Starting with the 60% I mentioned of variable cost, that disappears as quick as we are putting flights on the ground, as shown in that earlier pie chart. Secondly, when it comes to fixed cost, which is 40%, which is left, 8% of that, 8% -- percentage points are actually depreciation cost. It means it's not cash-out. And the rest, what is left, we are going to reduce by 1/3 through all these measures Carsten and I have gone through.

The third question, if we are speaking about concrete help from the government, I think all airlines are discussing with the government for the time being, but there are no concrete discussions in terms of how that would look like.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [13]

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Thank you very much, Ulrik. The next question, Junge Leute from Süddeutsche Zeitung. He would like to know from you, Mr. Spohr, what do you mean by saying that airlines cannot just go back to business as usual after the crisis?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [14]

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[Interpreted] Well, Mr. Leute, I think the most obvious and maybe simplest answer to your question, refers to size. As you know, we are currently operating 780 aircraft. And that means we are #2 just behind an American carrier in terms of our turnover. And I'm not a pessimist, but actually, what is happening right now at a global scale will reduce the size of the overall economy. And we react twice strongly to changes in the world economy. So I think this will affect us twice as much. Lufthansa Group, as a result, will shrink. And now we need to think about safeguarding the group with the government in Belgium, Austria, Switzerland and Germany and Italy.

And now this brings me on to my most important point. We need to think about the future of European aviation within global aviation. As you remember, in China, many airlines have been nationalized. The U.S. administration introduced a large package of measures. And they didn't actually mention any other sector of the economy apart from the aviation industry, and they want to support it to the tune EUR 50 billion (sic) [USD 50 billion]. So many governments are supporting their aviation companies. And now we need to talk to our national governments and also to the European Commission to see what role we want the European champions to play in the future on a global level, and that's what I mean by structure because the structure will look different. Private traffic will increase. Corporate business in the medium term will be reduced, maybe a little bit. What does that mean for our product portfolio, for our different AOCs? These are questions we need to debate and discuss over the next couple of weeks and months. This is what I mean by crisis -- structural crisis management.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [15]

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All right. Thank you. This fits in with the next question by Timo Kotowski from Frankfurter Allgemeine Zeitung. State subsidies are now debated with regard to liquidity help, and Lufthansa needs this help, the support, because otherwise, the debt would be too high. And he is now talking -- or he's asking about state -- the state taking over parts of the company.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [16]

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[Interpreted] Well, I am convinced that we, as the sectors, need to talk about these questions. If we take out big loans, then the airlines would stand no chance of survival in spite of all the liquidity support they would receive. And I'm not sure that the individual national governments would accept such a situation. So in the coming weeks, we would have to talk about different forms of support apart from pure loans to boost liquidity or maybe even state aid as granted by the U.S. administration or that was actually requested by the American airline companies. But it's too early days as yet to give a definite answer.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [17]

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So the next block of questions was submitted by [Garrett Hickman] from (inaudible). Well, the disadvantage of a conference call is that some questions overlap. So Mr. [Hickman] asked a couple of questions that have already been answered, and I would like to omit those. For instance, the question about concrete forms of state aid. Could the German government take over parts of the company, et cetera. We just addressed these questions.

But there are 3 further questions by Mr. Hickman to Mr. Spohr. Does Lufthansa defer commissioning of new Airbus and Boeing aircraft? How many staff will be affected by reduced working hours and how significant will the reduction of costs be?

And Mr. Hickman , if you need further clarification on your initial questions, please indicate this to us, but I suppose that this has been answered extensively.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [18]

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[Interpreted] Okay. Hello, Mr. [Hickman]. Of course, these days, we are talking to both Airbus and Boeing. They -- or rather, we entered into substantial contracts with them, with both of them, and we are one of their key accounts, key customers. Now if you look at the global development, Airbus and Boeing know they will face increasing difficulties because there are few airlines that are still going strong in those parts of the world. But -- and they, of course, suffer a great disadvantage because all the airlines are talking to both Airbus and Boeing about deferring deliveries, and we will keep reading about the news about what happens over the next days and weeks, but we will need to talk about the fleet strategy in the future.

But first of all, we will need to focus on deferral of cash out and other measures to boost liquidity. Well, as regards to staff, 31,000 staff are affected by reduced working hours. And as Mr. Svensson pointed out, 60% of variable costs will fall by the wayside if we stop our operations. And the remaining 40% will need to be reduced, but the biggest block among these is staff costs. And the legislation on reduced working hours in Germany allows us to bring them down to 0% because if working hours are reduced by 100%, then the staff get paid out 60% or 70% of their salary from the government. And we, as a company, need to top this up but we -- I'm sure we will arrive at a solution with the government.

Now there are also additional fees for parking our aircraft and for maintaining the infrastructure. That's very difficult to bring down. It's very difficult to completely ground an airline because this will still involve costs.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [19]

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A question to Stockholm, Ulrik Svensson, from Michael Csoklich from AviationNetOnline. He wants to know how high are the monthly fixed costs or personnel costs of the Lufthansa? Second, how long will liquidity last without state support? Third question, what about Austrian Airlines, do they need liquidity from you? Or is it independent in that regard? Fourth question, what do you expect from the EU regarding support and aid? Ulrik, it's yours.

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [20]

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Yes, personnel cost, which is the largest part of the fixed cost from a cash point of view. We have a total monthly payroll cost, including social -- extra costs and pensions of around EUR 750 million. Your question, how long would the liquidity last without any help from the government. I guess to some extent it's a theoretical question, since the government has been very clear that they will help in case that there are any liquidity problems. But as I said earlier, with the help of our very large unencumbered fleet and the opportunity we have to reduce the cost very quickly, as Carsten has explained about kurzarbeit and so on, we do not believe that that is going to be a problem. Your third question, it's a little bit of mixture on the line here. How long is -- it's difficult to read. What is the third question?

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [21]

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It's about Austrian Airlines.

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [22]

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Okay. Can you take that one more time? Because it's impossible to read here on the screen.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [23]

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Okay. Do we need to give Austrian Airline support with liquidity or is this airline managing the crisis on its own?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [24]

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We intend, for sure, to hold this group together, and we estimate that every airline will have enough resources to go forward for the time being. But of course, if things like Carsten said, would dramatically deteriorate with a long aviation global crisis, in case that is the situation, there will be need coming from different governments all over the world, not only within the Lufthansa Group. In terms of the fourth one, it's impossible to read as well. Could you repeat that?

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [25]

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Yes. What do you expect from the European Union in terms of support?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [26]

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Well, in terms of financial support, I don't think that's going to be direction. It's more the question of changing the rules, which Carsten was alluding to in the advance of his speech.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [27]

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Question to Carsten Spohr again asked by Stefan Bauer from dpa-AFX. He has 5 questions. First, how many flights will be deleted in the weeks to come? Second question, when do you expect that the worst-case scenario is over? Third question, what do you plan up to the end of May? Fourth question, do you dare make a forecast for the passenger development of the entire year? And fifth question, what do you expect for the summer season, a recovery or a loss of business to a major extent?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [28]

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[Interpreted] Thank you very much, Mr. Bauer. First question, that shows the entire dramatic situation. I cannot list all the flights, which will be deleted. But as the head of the second largest airline of the world, I know the schedule for next week by heart. We fly to New York 3x, 3x to Chicago, 3x to Montréal, 3x to Chicago, 3x to Johannesburg, 3x to Bangkok and 3x to Tokyo. On top of that, 30 short-distance flights from Frankfurt, daily 10 short distance, 30 for Frankfurt, 10 Zurich, 20 Munich. And in the case of Munich, there's a morning and an evening flight to London and Paris each, even Rome and Stockholm only once a day at the middle of the day. So that's what it looks like. And it was busy in the network management for a long time and we used to have 3-digit flight numbers and we had to switch to 4 digits, which was not so easy. And now we could do with 2 digits for the entire program of the company. This answer to your good question illustrates much more than I can offer you in terms of information today regarding the dramatic situation.

When the worst is over, while there are better experts than myself, but we plan with our crisis management. We are proud about it because it helped us in the past. We have a 3-month scenario of the grounding, which we have to name it like that. Also, although we continue with 10% and once it starts again, the flights won't be full overnight, but they will be filled slowly because you need booking room and capacity. And no one can seriously know it's in the full extent. And therefore, the actions presented by us also serve the purpose of unprepared future scenarios to be well prepared for that, too. And as shown, we do not only plan until the end of May, but up to summer '21, 12 months, and therefore, I don't expect any passenger developments because it may be that as of next week, we won't hardly have any passengers anymore, apart from the 50 daily flights on top of which we might have a few Eurowing flights, but not more than 5% to 10% of the capacity.

Summer season, recovery or major loss of business? Well, I would be happy just to know that we can start flying again as of summer. And then of course, it will still only be a special schedule and not the full schedule. But of course, we are ahead of other findings. And of course, we can anticipate a few things and maybe we don't need the discussion anymore or we'll have to assess it fully differently because of new developments.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [29]

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[Nikkan Rain] from Denmark from Borsen. And his question is, SAS has received SEK 3 billion in government support. Is it fair that the governments are supporting SAS at the expense of other airlines?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [30]

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Well, as we said earlier, and I think every airline in the world are having different discussions with their governments. We saw announcements of discussions with the U.S. government and the American carriers of more than USD 50 billion in grants. So I'm in no position to have any comments upon the achievement here with the governments and SAS.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [31]

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Question from Frankfurt from the Spiegel Capital from Claus Hecking. Mr. Spohr, in the corona crisis, the Lufthansa responded very quickly and announced savings program weeks ago already. Do you prepare plans for such crisis in recent years and did you activate them now? And if so, what does such preventive crisis management look like? Could you give us more details on that?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [32]

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[Interpreted] Thank you very much for your good question. As a matter of fact, 2 things play a role. Of course, we had information, for example, regarding China, which enabled us to act in an anticipating way because you can sense and suspect what is going to happen. Then of course, we also need a structure for crisis management. We have crisis staff, we have the [air rate] staff, the weaker structure of who is sitting together with what. We do exercises on that to handle such things, of course. And we didn't think about the dimension, which has now occurred. But, of course, we also need to consider the sensitivity of the management team, which should not be lost out of sight. And of course, we have responsibility for hundred thousand people on a daily note, customers, employees to the same extent. And then, of course, we are more sensitive regarding crisis. You sense them earlier and cautiously. And on top of that, due to flight operation, all the pilots we have, we have a checklist-type thinking and cooperation. And in sum total, we can accept your question in this sense.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [33]

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Next question by (inaudible) Newswire. She asked about the consequences of the current situation for the collective bargaining talks with the pilots and cabin union, UFO.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [34]

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[Interpreted] Well, of course, we have in-house rules, which we do with the partners to the collective-wide agreements like Verdi, and not UFO, in the first place. But the problem mentioned by you between UFO and the Lufthansa, well, in such crisis situations, we stand together. And since it was not about UFO or cabin staff, where the relations are good, but it goes rather about the problems of individual persons and their demands. And in such a crisis, they don't have the same meaningful nature anymore. And of course, we cooperate with the UFO professionally where we need the collective partner contribution and everyone will understand and have understood very quickly that it's about the future of the entire group.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [35]

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(inaudible) has an additional question related to cargo. And the question, where further demand increase can be seen and how much capacity can still be mobilized.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [36]

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[Interpreted] Well, it's hard to assess because there are unplanned delivery chains, which are at stake at the moment because they substituted the usual delivery chains taking place with ships or cars. We have jams up to 70 kilometers at the Polish border, for example. So we get the first request from Eastern Europe for medical preparations, for example, which normally would transport on trucks which doesn't work anymore. And with the WHO, we'll also see how medical resources like breathing apparatus or masks can still be transported. And it's also about the repatriation of German citizens to be taken back to Frankfurt. And we are in a more intensive dialogue now to know where air cargo is needed. And our crews with a high number of volunteers will make sure that the transport is guaranteed where the demand really is, especially regarding medical equipment and material. So everything which will be needed will be provided by Lufthansa to the necessary extent.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [37]

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Next question by (inaudible). She asked, was Lufthansa insured against such a loss? Or are there such insurances providing insurance in case of such a pandemia? Second question regarding the cargo area. What about the air passenger sector, could this partly compensate?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [38]

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[Interpreted] Well, no airline of the world can be insured against such a pandemia. Another matter of insurance is in case the state adopts measures, which influences the situation in your way. Second question, well, despite all appreciation of air cargo transportation, which I was in charge of for a long time, but with the expansion to the passenger business compensation, this doesn't compensate for the losses. And even if you use air, passengers on top of transportation of cargo, well, this would mean that the cargo could only be transported in the belly. But of course, we would have to show our part of responsibility within the scope of industry infrastructure.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [39]

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Well, this takes us to a question from Italy. Leonard Berberi from the Corriere della Sera. Surprisingly, a question regarding Alitalia.

Talks about a commercial agreement with Alitalia (inaudible). Spohr?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [40]

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[Interpreted] Well, we presented our position to the Italian government. And of course, we said they need an investor, which, for the time being, is the state, but they also need a partner because without a partner, you can't make it even Lufthansa or SWISS, our vessels. So if the states now re-support their airlines, this is necessary, but it does in the way -- was the logic is that we, as Lufthansa Group, and others can only be successful together globally. And this also holds for other ones. So the question is, again, what the European aircraft and air flight industry will look like after the crisis.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [41]

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Next on Peter van Ammelrooy from de Volkskrant in the Netherlands. And the question is, how much has Lufthansa paid for passenger compensation in 2019? And do you think that changes are needed when it comes to the EU Regulation 261?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [42]

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We paid in 2019 EUR 239 million. And we would expect if this corona crisis continue, that this will indeed be a discussion with EU or compensation through the government. Of course, as Carsten already alluded to, we are happy to fly, but we cannot fly. So this is going to be a continuing discussion at a very high level.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [43]

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[Rita Munk] from Hamburg. She would get an answer from Mr. Spohr regarding the structural changes. What they could look like? What business models have the best future-oriented chances? The network carriers, state carriers, low-cost carriers or charter carriers? And what about the market changes you expect after the crisis?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [44]

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[Interpreted] Well, I mentioned that we deal with these questions. I would wish to have the answers already or the other way around. If I had answers, we wouldn't have to deal with these questions. It's still too early. It will take a few more days before everyone understands fully that there will be changes. At Lufthansa, in the past 10 years, we went much strongly into the private segment and well, because the situation there is more stable. But we'll have a strong leg there. We are no pure business airline anymore, you cannot live on that exclusively.

Question. Will the traveling behavior change given all the use of the media we have? Or will that lead to more traveling because there's a pent-up demand? Well, please give us a few more weeks to talk about this with the experts in an intellectual and structured way on a high level. Now short-term crisis management is in the focus. But let me repeat to say that there will be these changes mentioned by you. We don't know which ones yet. But if someone is prepared for it, it's Lufthansa. Because we have all these things in the portfolio. We have a large charter supplier. We have cargo. We have low cost. We have premium. So whatever will become stronger or weaker, we have it and we are positioned accordingly.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [45]

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[Ryan Kowalewski] from Dusseldorf from the Rheinische Post. He also has a question. He wants to know whether the German large company shall come together to -- for example, to produce and transport breathing masks as in the United States.

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [46]

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[Interpreted] Well, last night, we took a decision that we enter into a contract with a large face mask producer -- manufacturer. But however, they are now required, especially in the medical sector. So that doesn't only happen by means of a contract. It also needs to be transported. Logistics is also a question. We need to extend these measures. Now the resources that this country needs will have to go to the sectors where they are most needed, of course, especially in the medical sector, the hospitals that are bearing the brunt of the current crisis, and we would like to assist them in any way possible. And I think that's what we need to do, and we are very willing to do that.

And Dusseldorf, now my perspective is one from Lufthansa, but Eurowings will also continue flight operations at 5% to 10%. They are also a part of the repatriation flights to bring people back home from abroad so they will also keep up 5% to 10% of their flight operations with a trend towards the decline.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [47]

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Another question from -- to Stockholm from [Garrett Hickman] from (inaudible). Do you venture out on a loan for a forecast for 2020? And will the LH Group make a loss in spite of the sale of LSG? And is the sales price secured?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [48]

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Yes, with any guidance for 2020. There are too many uncertain parameters. It's the question of how long will this corona crisis last, what would be the actions of customers and governments. So the only thing we are saying is profits will obviously be significantly lower in 2020 compared with 2019. I cannot see the rest of the questions on the slide. We can take them higher up, please?

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [49]

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Yes. It was about the LSG, whether it is -- yes...

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [50]

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Yes. So we have sold LSG Europe to Gategroup. And clearly, we expect this transaction to go through a little bit later this spring.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [51]

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Okay. And we stay in Stockholm. Joe Miller from the Financial Times, wants to know, are you concerned about the possibility of competitors like Air France being nationalized and other carriers getting potentially substantial support?

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Ulrik Svensson, Deutsche Lufthansa AG - CFO & Member of Executive Board [52]

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Well, as we said earlier, we have seen quite some movement. We spoke about SAS and the government's back home here in Scandinavia. There is a lot of movement in U.S. with this $50 billion grant. So I think there will be different solutions in different parts of the world. We have also seen Alitalia being nationalized. So indeed, there will be a local solution in many different countries.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [53]

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(inaudible). He has a question to Mr. Spohr. Do you fear that the differences in the individual sectors between the airlines will be leveled out and that Lufthansa will suffer a disadvantage as a result of that?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [54]

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[Interpreted] Well, of course, Lufthansa has been demanding for years to introduce fairness in all sectors, and that also applies to this crisis. And would that generate more unfair market conditions? Yes, I actually fear that this could be the case. But the discussions I've had with the German government and with the European Commission with the governments in Austria and Switzerland, then one thing has become clear. And the corona crisis will reinforce this impression. Now I'm not nervous. But I'm actually open to a level-headed debate. All stakeholders have this concern, and we want the European aviation industry to emerge in a strong position from this crisis. And I'm actually confident that this will happen. And over the coming weeks and months, this will become clearer.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [55]

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Mr. Spohr, you mentioned Dusseldorf and Eurowings. Originally, Eurowings was supposed to operate at a profit to make a turnaround in 2020. Now this crisis has obviously invalidated this plan. Now when do you expect Eurowings to make a profit?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [56]

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[Interpreted] Well, Mr. Svensson already pointed out that we were making great progress in terms of the turnaround of Eurowings. And that also held true for the first weeks of this year because Eurowings was only affected by this crisis at a later stage. But now to speculate about the coming months or years, it would just be futile because what we need to focus on first is to get our aircraft flying again at some point to the few destinations that are still available in all our home markets, and then we will need to retain our customers or win over customers back, and we will need to rebuild the aviation industry, and then I will maybe be in a position to answer your question.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [57]

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Two questions that are very similar by Timo Novack from aeroTELEGRAPH and Ian Taylor by Travel Weekly. Of the crisis, saying the Lufthansa Group will not return to flying as now, can you explain more what issues will you address? And what changes do you foresee in Europe's aviation markets?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [58]

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[Interpreted] Well, I just wanted to make clear that we will have to deal with these questions. But please don't expect any answers right now because it will take weeks and months to discuss these issues and to find solutions and answers that would allow any structured progress. So this is too early yet. But it would be unimaginable not to envisage structural changes in these aviation industry. Now we will try to find solutions first before our competitors. And of course, our focus will be on operational questions.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [59]

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We don't have many questions left. If you still have questions, please send them to us now. Otherwise, I'll continue with the question of (inaudible) to Mr. Spohr. What about the bonus to the Executive Board for 2020?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [60]

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[Interpreted] Yes. Yesterday on the Supervisory Board, we decided not to call this bonus. And of course, we want to pay bonuses by way of stocks or shares instead of cash, especially to pilots and other staff members. And now we are reviewing the legal situation, but the bonus that was supposed to be paid to the executive Board will not be paid.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [61]

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Two further questions from Claus Hecking, who has an additional comment. Lufthansa currently only has a market capitalization of EUR 4 billion. How big is the risk of a hostile takeover? And how can you protect yourself from that?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [62]

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[Interpreted] Well, in Germany, there is a law about -- concerning the aviation sector requiring documentation. And this law stipulates that Lufthansa needs to be majority-owned by European stakeholders. But now, of course, the situation has changed, and we don't know if the situation will happen. If there is a hostile takeover, we saw that the market capitalization of our British competitor, or British-Iberian competitor, was close to 1. And I think if there was any attempt of a hostile takeover, we would very quickly talk to the German government to avoid this.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [63]

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The last question is by Stefan Bauer. He has 3 questions actually. First, is it worthwhile for Lufthansa to take part in the airlift? Do you make a profit? Or do you just breakeven? Second question concerning the Boeing 777. What is your take on Boeing? Do you continue with your advanced payments for the 777 and the 787? The third question concerns market consolidation in Europe. What about Alitalia and TAP Portugal. Could you even envisage a takeover of these companies? Or if the situation becomes good again after the crisis? Or is this excluded?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [64]

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[Interpreted] Well, as I already said, we should not talk about economic optimization, but rather about assuming our responsibility. I can only refer to our Foreign Minister who answered to the question about how many -- how much people would have to pay for being repatriated. He said, "Well, first, we'll get them back and the government will charter our planes, and they will have to pay some economy ticket for that." But first, we will do that. We will talk about how we price this in? What prices we fix for them? Of course, we shouldn't run these services at a loss, but I think just to give you an idea, usually in March, usually, Lufthansa makes a profit of EUR 3 billion. And now we read about EUR 50 million which is spent by the government to repatriate the governments, but you can think about how much time we would usually take to generate this profit. So we are far from a situation where we can talk about running a profit.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [65]

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So Richard Weiss has a couple of further questions. The delivery of ordered aircraft. How much do you expect to save by deferring the delivery of orders? How many orders are deferred? And do you also think about canceling certain orders and for which aircraft type -- to which aircraft type would that apply?

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [66]

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[Interpreted] Yes, Mr. Weiss. This is exactly what we're talking about with Airbus and Boeing. Also the advanced payments, some of them have been already paid for. And we are thinking about which deliveries to defer, which orders to cancel, that is what we're talking about with Toulouse and Seattle. Originally, we had planned to take an airplane into commission every 10 days. Of course, this is no longer the case. And now it's not only Lufthansa that is talking to Lufthansa and Airbus, but every airline in the world. And you can just -- probably, it's very difficult to have an idea, the chaos that is raining them. But we are looking into this, and we will engage in negotiations with Airbus and Boeing.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [67]

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So the last question from the Netherlands for Peter van Ammelrooy. After being grounded for weeks and months...

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Carsten Spohr, Deutsche Lufthansa AG - Chairman of the Executive Board & CEO [68]

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[Interpreted] There are different states for grounding aircraft. For instance, if you just park an aircraft overnight, then it takes 60 minutes to get them flying again. But if you ground them for several days, then it just takes a couple of hours. And if you ground them for longer, sometimes it takes weeks. Now we will keep some aircraft ready to be taken into service again in a couple of days for emergency flights. Maybe we will also take some aircraft out for some heavy-duty maintenance, so they will not be available for a couple of months. But of course, we will have sufficient aircraft available. And if we see the day when these travel restrictions will be lifted again, then we will not see operations take up again overnight. Usually, we handle 280 passengers per minute in our company. And we are far from achieving this. It will take a long time before we see these levels again. And we are trying to prepare successively for this scenario and to ramp-up operations again after the grounding.

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Andreas Bartels, Deutsche Lufthansa AG - Senior VP & Head of Lufthansa Group Communications [69]

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Thank you very much. So we've come to the end of today's questions and answers. Thank you, Mr. Spohr. It was an extraordinary press conference. Thank you everyone for watching, for following us online, for your questions. Now from me and from all of us in Frankfurt, have a good day. Goodbye.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]