Annual Report 2018 Content

FOCUSED AND DETERMINED ANNUAL REPORT 2018 CONTENT 06 BOARD OF DIRECTORS 07 LUXAIR S.A. SHAREHOLDING 08 CHAIRMAN’S LETTER 10 CEO’S LETTER 12 BUSINESS REVIEW 14 LUXAIR LUXEMBOURG AIRLINES 18 LUXAIRTOURS 22 LUXAIRSERVICES 26 LUXAIRCARGO 30 Performance at a glance 34 EXECUTIVE COMMITTEE 36 FINANCIAL REVIEW 38 Consolidated assets 40 Consolidated liabilities 42 Consolidated income statement 43 Financial performance at a glance 44 CORPORATE SOCIAL RESPONSIBILITY 46 Social Report 56 Key performance indicators 5 BOARD OF DIRECTORS 4 5 BOARD OF DIRECTORS LUXAIR S.A. SHAREHOLDING PAUL HELMINGER FRANÇOISE THOMA The share capital of Luxair S.A. amounts to 13,750,000 EUR and is represented by 110,000 shares held by the shareholders. Chairman Vice-Chairman of the Board of Directors of the Board of Directors, Etat du Grand-Duché de Luxembourg 39.05% Chief Executive Ofcer, Banque et Caisse d’Epargne Banque et Caisse d’Epargne de l’Etat 21.81% de l’Etat Banque Internationale à Luxembourg 13.14% Deln 13% MICHEL BIREL HUGUES DELCOURT MICHÈLE EISENBARTH GIOVANNI Luxair 10% Member Member Member GIALLOMBARDO Luxair Finance 2.86% Deputy Chief Executive Ofcer, Chief Executive Ofcer, Ambassador, Member Others 0.14% Banque et Caisse d’Epargne Chairman of the Executive Director of European affairs and Member of the Management de l’Etat Committee, International economic relations, Board, Deln, Banque Internationale à Ministry of Foreign Affairs Member of the Management *Until 13 May 2018 Luxembourg Board, Unicredit Luxembourg *Until 26 April 2019 *Until 13 May 2019 Main companies in which Luxair holds a participation MARCEL LEYERS GUY ROSSELJONG JEAN-LOUIS THILL TOM WEISGERBER Cargolux Airlines International 35.1% Member Member Member Member Luxfuel 40% Chief Executive Ofcer, Deputy Chief Executive Ofcer Ambassador, First Government Advisor, Euro Moselle Loisirs 35% Chairman of the Executive Banque et Caisse d’Epargne Director of European affairs and Ministry of Mobility Ojectif Lune 35% Committee, de l’Etat International economic relations, and Public Works Banque Internationale à Ministry of Foreign Affairs *Since 14 May 2018 Luxembourg *Since 26 April 2019 *As from 13 May 2019 HELDER PATRICK STREFF MARC ZAFRA DE OLIVEIRA BORGES Member Member Member LuxairGroup personnel LuxairGroup personnel LuxairGroup personnel representative representative representative MAX NILLES GWENN Government Commissioner VANWEDDINGEN for Luxair S.A. Secretary of the Board of Directors Conseiller, Chargé de Direction of Luxair S.A. Ministry of Mobility General Secretary LuxairGroup and Public Works 6 7 CHAIRMAN’S LETTER LuxairGroup’s development over the last years has been exceptional. permanently reviewed offer of destinations, hotels and products, make Thanks to the strong evolution of all of its Business Units, LuxairGroup it stand out from the others. LuxairTours also initiated a review of its not only conrms that it is one of the main actors of the regional distribution channels, developing its online business and investing in economy, it also has proven to be one of its main drivers. partnerships with travel agencies. LuxairTours thus evolved over the THE RIGHT past years to become a steady prot centre of the group. In 2011, Luxair Luxembourg Airlines offered a capacity of 1.971 million seats and had 15 aircraft, compared to 3.068 million seats and 20 That reliable prot-maker had traditionally been the air cargo handling aircraft today; yearly passenger numbers grew by 78% between 2011 unit LuxairCARGO, but the major crises in the world’s economy took and 2018. LuxairTours increased its passenger numbers by 53% their toll as declining world trade was generating overcapacities in DECISIONS during the same period, with ve more destinations on offer today the market, putting heavy pressure on the margins. LuxairCARGO than 8 years ago. LuxairServices accompanied the steady growth of recovered and has shown record numbers of handled tonnage for the Lux-Airport, with 1,792,000 passengers handled in 2011 compared last three years – however, the protability never improved due to a to 4,040,000 in 2018. The LuxairCARGO performance speaks for very sensitive and volatile market which remains unpredictable and itself: 678,000 tons of air cargo were handled in 2011; in 2018, the dependent on the global economy. AT THE annual volume reached 957,000 tons. Last but not least, LuxairServices, the passenger and ground handling This operational development unfortunately was not always in line business unit of LuxairGroup successfully dealt with the outstanding with the nancial results. LuxairGroup nevertheless mostly managed growth of lux-Airport. LuxairServices succeeded in developing its to achieve positive operational earnings and always showed a very operations by convincing the airport’s customers with the excellence RIGHT sound balance sheet. and quality of its service. This overall performance is outstanding because during the same time In summary, all four LuxairGroup business units are performing well, period, LuxairGroup had to contend with ever ercer competition in its despite their competitive environment. Although the airline business is home market and has been inuenced by the global economic trends. and always will be LuxairGroup’s core business, it is the combination of TIME diverse airline related activities that allow LuxairGroup to withstand the At the end of the day, excellent governance and a strong leadership made it possible to achieve these results: LuxairGroup’s development economic and competitive pressure, operational as well as nancial. certainly shows that the strategic adaptations LuxairGroup made over LuxairGroup is proud of its performance and proud of its role as a the years were the right choices at the right time. major actor - and driver - in the regional economy. This role also includes a social responsibility that LuxairGroup always assumed, LuxairGroup’s business model is complex, in many aspects. First of guaranteeing employment for its almost 3,000 staff as well as for the all, LuxairGroup is a small player in the European airlines industry, but over 3,000 indirect jobs which depend on its activities and the airport, it competes with the big ones. Nevertheless, it has a vital function for on top of its role as a key pillar of the economic development and the regional economy and lls a niche, as Luxair Luxembourg Airlines growth for the Greater Region. guarantees direct operations to the main European business centres and capitals. It’s a role that competitors could not take over, since In a world that is continually accelerating, where innovation and they mainly serve their own hubs and consider Luxembourg as a exibility are key to a sustainable future, LuxairGroup will continue destination amongst many others. doing big things, by taking the right decisions at the right time – just as it always has! LuxairTours remains the number one tour operator in the greater region. Its reliability and proximity to its customers, combined with a Paul Helminger Chairman of the Board of Directors 8 9 CEO’S LETTER 2018 was once again a challenging year for LuxairGroup and its main activities The airline side of our business experienced an 11% growth in passenger Airline, Tour Operating, Airport Services and Cargo Handling. Three constants numbers and our service quality was rewarded with the Trip Advisor’s have paced our businesses over the last years: the perpetual need for change “Travellers’ Choice Award” for airlines in 2018. and innovation, an unpredictable future and a challenging environment. In CHALLENGED other words, all of our activities were under constant pressure. The tour operator business – LuxairTours – saw an increase of 9% in passengers and remains the leading package holiday provider in the The aviation industry has recently undergone a huge transformation, marked Greater Region. LuxairTours also broke new ground with the successful by numerous airlines disappearing or being taken over by big groups, launch of a new destination in the Middle East, Ras Al Khaimah. leading to a consolidation in a market now dominated by only a handful BY of players. Nonetheless LuxairGroup, largely thanks to the diversity of its LuxairCARGO, the air cargo handling unit, showed a slow growth of 2% in activities, remains as one of the last independent regional airlines in Europe. line with the global economy, nevertheless realising another record year in handled tonnage while broadening its customer base. One has to consider that the investment and the sheer effort to keep up with the competition and assure the necessary growth are proportionally Our Airport Services unit beneted from Lux-Airport’s steady growth CONSTANT larger for a regional player like LuxairGroup. Thus, the challenge for to reach a record number of 4.04 million passengers serviced while LuxairGroup is to manage this perpetual evolution, particularly, but not constantly maintaining LuxairGroup’s high standards in terms of quality, only, when it comes to digitalisation, which revolutionised the service safety, security and comfort of people and goods. industry. LuxairGroup therefore launched a huge programme to ensure that our company was and always will be state-of-the art in its operations The outlook, however, remains uncertain, mainly for reasons beyond our CHANGE and in customer service. control. Upcoming international trade conicts, the Brexit uncertainty and political instability all inuence the world economy. The air cargo Our goal is to offer at least the same level of quality as the big players, business already noticed a slowdown in international trade during the last who have much greater leverage in technological, nancial and human semester of 2018, and this trend continued in 2019. Volatile fuel prices resources at their disposal. Over the last couple of years, we have launched affect the airline business, which is also subject to a notable increase new websites and introduced personalised services at all levels, always of severe disruptions due to strikes or adverse weather conditions. As with customer care as the main driver for innovation.

Load more