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Financial Analysis Report

Project Team: Carla RAMIREZ

Ma,hias HÜBENER Daniel ROMO

Financial Statements Analysis Class Professor: Fahmi BEN-‐ABDELKADER

Table of Contents

Strategic and Economic Assessment 3 – 9

Growth Analysis 10 – 16

Profitability Analysis 17 – 22

Risk Analysis 23 – 26

Conclusions 27 – 29

Strategic and Economic Assessment

Overview of Deutsche LuWhansa AG

4

Passenger Airline Group 75.4%

Logis]cs 8.0%

Maintenance & Repair Services 8.9%

Catering 6.8%

IT Services 0.9%

Lu:hansa’s business segments in % of group revenue 2014:


•  Deutsche LuWhansa AG is a German airline and holding company for several other airlines and further avia]on-‐related companies (see graphic).

•  Combined with its subsidiaries, its fleet of over 615 passenger aircraW belongs to the largest fleets in the world, connec]ng 321 des]na]ons in 107 countries.

•  LuWhansa is the largest European airline both in terms of overall passenger volume and fleet size.

•  LuWhansa has established a premium brand posiJon in quality and safety, catering to business travellers’ needs.

•  In 2014, LuWhansa carried over 105 million passengers, reported group revenue of 30 billion Euro and had more than 118,000 employees on its payroll.

•  LuWhansa was founded in 1953 as a state-‐owned enterprise and was subsequently priva]zed in 1994.

LuWhansa’s Recent Business Performance

•  In 2013 LuWhansa’s low-‐cost airline Germanwings started to operate all domes]c flights formerly serviced by LuWhansa except those from the main hubs in Frankfurt and Munich.

•  LuWhansa has been heavily invesJng in its fleet and ordered 59 wide-‐body and over 100 narrow-‐body aircraW in 2013 alone.

•  LuWhansa had to handle prolonged labor issues over compensa]on and re]rement benefits over the last years, leading to frequent disrup]ons of flight schedules.

•  In the last ten years, Lu:hansa didn’t pay any dividend in 2009, 2012 and 2014 because of nega]ve results.

5 Financial Analysis Report

Recent business development Lu:hansa in 2014

•  LuWhansa faced enormous compeJJve pressure from low-‐cost carriers in Europe as well as from state-‐owned Gulf airlines on routes to Asia leading to declining average yields.

•  Large-‐scale strikes by LuWhansa’s pilots had a significant impact on business performance.

•  Exchange change rate effects depressed LuWhansa’s opera]ng result.

•  Falling oil prices reduced LuWhansa’s fuel costs, but also affected its fuel hedges.

•  Falling interest rates led to an increase in pension liabili]es.

•  A new CEO came into office in May 2014.

2 Year Stock Price Evolu]on (Ending 22.12.2015)


Deutsche LuWhansa (LHA.DE) AirFrance-‐KLM (AF.PA)

Change in Accoun]ng Policies

•  For this analysis it is relevant to consider recent changes in accoun]ng policies introduced by LuWhansa, which have affected net results.

•  One of the most relevant changes were made in 2013 to DepreciaJon and AmorJzaJon policies.


Specifically, the useful lives of aircra4 and reserve engines was extended from 12 to 20 years and their residual value was reduced from 15% to 5%.

•  These changes have arJficially boosted EBIT and thus all conJngent results. •  However, this should also have a negaJve effect on Lu:hansa’s tax shield and result in reduced future cash flows.

Airline Industry Overview


CompeJJve environment

•  Highly compe]]ve business environment due to general overcapaci]es in the market, compe]]on from low-‐cost carriers and state-‐subsidized Gulf airlines.

•  Industry profitability is generally negaJve (ROCE – WACC between 1990 and 2010: -‐ 2.1%).

Developments in the industry

•  Air travel has basically become a commodity – in economy, there is almost no room for differen]a]on, so compeJJon is mostly on cost. Only in business and first class there is room for higher margins.

•  As a result, new low-‐cost carriers compete with established airlines that face significant legacy costs.

Industry consolidaJon

•  There is a general trend towards consolida]on: Already mostly finished in the US, but currently under way in Europe (would improve the pricing environment).

•  Some large mergers have already taken place, e.g. Air France – KLM or Bri]sh Airways – Iberia – Vueling.

General characterisJcs

•  The business is cyclical and depends on the global economic environment.

•  Long-‐term growth industry: passenger-‐kilometers have been rising on average by 5.9% per year.

•  Disparate growth development in the world (Europe and USA vs. emerging markets).

What do we expect to see?

The airline industry has certain characteris]cs that we believe should manifest themselves in the financial statements. Before carrying out our assessment, among other things we are expec]ng the following:

•  Low margins due to a highly compe]]ve environment.

•  High asset turnover to compensate for said low margins.

•  High relevance of Fixed Assets in the Balance Sheet. •  Low inventory levels, because airlines offer a service. •  Due to record low oil prices, we expect a decrease in opera]ng costs of sales. •  Some issues with pensions or other labor-‐related topics, due to recent turmoil with airline workers, and pressure from low-‐cost Airlines with rela]vely lower labor costs.

•  A high financial leverage ra]o due to most airplane purchases being made with debt.


Growth Analysis

Wealth Crea]on (1/2)

•  Net Sales have slowed down aWer 2012 to near 0% growth rates in 2013 and 2014.

•  This is in accordance with the industry performance.

•  It is important to men]on that revenue drop is not due to a fall in sales volume (+2.4%) nor in the number of passengers (+1.3%), which have in fact increased.

•  LuWhansa faced intense and increasing compe]]on during the past years, which has lead to the need for LuWhansa to lower prices (-‐2.7%).

•  At the same ]me EBITDA is going down over Jme, which suggest a cost increase at a higher rate than revenues.

•  Net Income was slightly negaJve in 2011, and has been extremely vola]le in recent years.

11

Growth rate CAGR Net Sales 2.55% Total Assets 0.78% EBITDA -‐5.60% Net Income -‐45%

-‐30%

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2011 2012 2013 2014

Yearly Percentage Va

ria]o

n

Growth Rate Evolu]on

Net Sales Total Assets EBITDA


Wealth Crea]on (2/2)

•  According to data from the Interna]onal Air Transport Associa]on (IATA), jet fuel has represented on average 31% of the total costs of member airlines during the past 4 years.

•  For this reason, it will be important to keep an eye in the evolu]on of oil prices. The latest forecast put forward by the IATA indicates that the yearly average for 2015 will be $78 per barrel, in sharp contrast with the past 4 years, which averaged $118 per barrel.

•  The sustained growth in number of passengers observed for LuWhansa is consistent with industry sta]s]cs, which evidences a sustained and even accelera]ng growth in passenger-‐kilometers flown.

12

$-‐

$50

$100

$150

2010 2011 2012 2013 2014E 2015F

Jet Kerosene Prices in USD/Barrel (IATA )

4%

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2010 2011 2012 2013 2014E 2015F

Industry-‐Wide Passenger APK Yearly Growth

Total Revenues


Investment Policy

•  Capital Employed has remained rela]vely constant during the years, however there was a significant increase during 2014.

•  As Opera]ng Working Capital has also remained rela]vely stable, the increase in Capital Employed is linked to an increase in Fixed Assets.

•  This suggests that LuWhansa has invested considerably on its fleet and other fixed assets.

•  This was confirmed by LuWhansa’s fleet data, which registered that a total of 12 long-‐haul aircraW were delivered in 2014. During the same year, 29 more were ordered.

•  As was expected for an Airline, Lu:hansa considers its fleet to be the largest asset on its balance sheet.

13

-‐6,000 € -‐3,000 €

0 € 3,000 € 6,000 € 9,000 € 12,000 € 15,000 € 18,000 € 21,000 € 24,000 €

2010 2011 2012 2013 2014

Aggregates Evolu]on

Fixed Assets Opera]ng Working Capital Capital Employed

Assets Analysis 2010 2011 2012 2013 2014 Fixed Assets / Total Assets 64.7% 66.3% 65.8% 66.7% 72.9% Inventory / Total Assets 2.3% 2.2% 2.2% 2.2% 2.3% Accounts Receivable / Total Assets 11.9% 12.7% 12.9% 12.6% 13.5% Cash & Equivalent / Total Assets 20.0% 15.7% 18.1% 17.7% 10.5%


Financial Resources (1/2)

•  While analyzing Invested Capital, a significant increase in net financial debt is iden]fied for 2014.

•  It is important to men]on that debt in this case considers “Provision for Risk and Charges” (PRC), which when included in this analysis, and in par]cular the es]ma]on of the Leverage Ra]o, can be considered a conserva]ve approach.

•  This is because PRC is a long term liability which can be considered debt, but is not interest bearing debt.

•  Having explained this, Lu:hansa’s debt has increased mainly because of PRC, which has risen due to pension liabiliJes being pushed up by falling interest rates.

•  Also notable is that equity is diminishing, possibly because of poor past performance aliena]ng investors.

•  Both of these effects are reflected in leverage and debt-‐to-‐capital ra]os.

14

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2010 2011 2012 2013 2014

Invested Capital

Shareholders' Equity Net Financial Debt Invested Capital

Financial Resources 2010 2011 2012 2013 2014 Leverage Ra]o 75.2% 80.5% 201.9% 138.4% 324.2% Debt-‐to-‐capital ra]o 42.9% 44.6% 66.9% 58.1% 76.4% Long-‐term debt / Total Liabili]es 29.7% 29.0% 25.1% 21.0% 20.3% Short-‐term debt / Total Liabili]es 4.7% 3.2% 4.1% 6.8% 3.0% Accounts payable / Total Liabili]es 13.8% 14.0% 11.7% 13.2% 11.1%


Financial Resources (2/2)

•  Looking at the composi]on of Gross Financial Debt, we observe that PRC has historically represented a significant percentage of it.

•  During 2014 PRC represented 48% of gross financial debt.

•  For this reason, if we remove the PRC from Debt Analysis, the results are much less alarming.

15

0 €

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2010 2011 2012 2013 2014

Gross Financial Debt

ST Debt & Current Por]on of LT Debt Long Term Debt

Provision for Risks & Charges Deferred Income

Deferred Tax Liabili]es Other Liabili]es

Financial Resources without PRC 2010 2011 2012 2013 2014 Net Financial Debt without PRC 5,235 3,142 3,343 3,731 3,056 Financial Leverage without PRC 129.9% 51.4% 69.1% 46.4% 36.6% Debt-‐to-‐capital ra]o without PRC 56.5% 34.0% 40.9% 32.0% 26.8%


Cash Cycle Analysis

•  As expected from the low inventory levels observed, LuWhansa holds inventory for a very short period.

•  Both receivable and payable days work against Lu:hansa: they are becoming less effec]ve in collec]ng from their clients, although sales are not decreasing.

•  On the other hand, LuWhansa is gesng less days to pay back their suppliers, again possibly because of their poor past performance.

•  Overall, the cycle is working against them: it is becoming a “get cash later, pay earlier” approach that has almost doubled in recent years.


Cash Flow Analysis 2010 2011 2012 2013 2014 Cash From Opera]ng Ac]vi]es (I) 2.992 2.356 2.842 3.290 1.977 Cash From Inves]ng Ac]vi]es (II) -‐1.450 -‐1.643 -‐1.445 -‐1.983 -‐2.274 Free Cash Flow (I+II) 1.542 713 1.397 1.307 -‐297

Cash Cycle Analysis 2010 2011 2012 2013 2014 Inventory days (DIO) 11 10 9 9 10 + Receivable days (DSO) 48 45 45 45 50 -‐ Payable Days (DPO) 50 44 41 45 44 = OperaJng Working Capital days worth of sales 9 11 13 9 17

•  FCF was posi]ve in all but the last year, indica]ng that LuWhansa was able to cover its investment needs with its cash flow from opera]ons. In 2014, FCF dropped markedly and changed sign to become negaJve.

•  In 2014, we observe both reduced CFO due to the new depreciaJon method for aircra: and adverse business performance.

•  Furthermore, the heavy investment program started is reflected in a steep increase in CFI from 2013 onwards.

Profitability Analysis

Common-‐Size Income Statement Analysis


•  Both Cost of Sales and OperaJng Expenses have been growing over the last five years. Consequently, the Gross Margin and EBITDA Margin have been declining.

•  Despite the strong tailwind from the new depreciaJon method for aircra:, there was a marked decline in the EBIT margin.

•  We conclude that Lu:hansa faces strong cost pressure and shows a negaJve scissors effect.

•  LuWhansa seems to have started with a cost cusng program in 2012 as Opera]ng Expenses significantly drop but cost management sJll seems poor given that Opera]ng Expenses have been increasing again by over 20% per year for the last two periods (see income statement trend analysis in Excel).

Profit & Expenses as Percent of Net Revenue 2010 2011 2012 2013 2014

Net Revenue 100% 100% 100% 100% 100% Cost of Sales 79.5% 81.0% 81.5% 82.2% 81.3% Gross Margin 20.5% 19.0% 18.5% 17.8% 18.7% Opera]ng Expenses 9.0% 10.3% 7.0% 9.0% 11.1% EBITDA Margin 11.5% 8.7% 11.5% 8.7% 7.6%

Deprecia]on & Amor]za]on 6.3% 6.0% 6.1% 5.9% 5.0% EBIT Margin 5.2% 2.7% 5.4% 2.8% 2.6% Net Financial Expenses 1.3% 1.0% 1.2% 1.2% 0.9% Pretax Income 4.3% 1.6% 4.3% 1.8% 0.6% Corporate Income Tax -‐0.6% 0.5% 0.3% 0.7% 0.3% Net Profit Margin 4.3% 0.0% 4.1% 1.0% 0.2%

NOPAT Margin 5.2% 1.7% 5.0% 1.7% 1.1%

Return on Invested Capital and EVA


•  The ROIC has been very volaJle over the years largely due to the significant fluctuaJon of the NOPAT margin. This fluctua]on is partly explained with dras]cally different levels of the effec]ve corporate tax rate, which varied between 0% in 2010 and 58% in 2014. Moreover, EBIT itself was subject to large swings.

•  The turnover rate of capital employed was stable around 2 from 2011 and 2013 but took a hit in 2014, reflecJng the poor net revenue growth performance of Lu:hansa, combined with conJnuing investment (CapEx / Sales has been around 8% from 2010 to 2014).

•  While the WACC has been consistently falling, LuWhansa’s ROIC has been higher than the WACC only in 2010 and 2012 and thus destroying value for its shareholders in all but two years.

ROIC (Return On Invested Capital) 2010 2011 2012 2013 2014 NOPAT Margin 5.2% 1.7% 5.0% 1.7% 1.1%

* Turnover rate of Capital employed 1.81 1.98 2.06 2.06 1.76

= ROIC 9.5% 3.5% 10.3% 3.5% 1.9%

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2010 2011 2012 2013 2014

LuWhansa Economic Value Added

WACC

ROIC

Peer Comparison with Air France


-‐6% -‐3% 0% 3% 6% 9%

12%

2010 2011 2012 2013 2014

ROIC Comparison

ROIC LH ROIC AF

-‐4%

-‐2%

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2010 2011 2012 2013 2014

Profit Margin Comparison

NOPAT LH NOPAT AF

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2010 2011 2012 2013 2014

Turnover Rate Comparison

Turnover LH Turnover AF

•  Lu:hansa’s ROIC is generally higher than that of Air France.

•  Only in 2014, Air France starts to outperform LuWhansa.

•  The comparison shows that the NOPAT margin evolu]on mirrors the ROIC. While the NOPAT margin is declining for Lu:hansa, Air France has seen a comeback from its 2013 nadir, eventually overtaking its compe]tor. At the same ]me, Lu:hansa’s turnover rate, which was iniJally higher, declined last year, while Air France has con]nually improved its rate over the period.

Return on Equity and Financial Leverage


•  Lu:hansa’s ROE was extremely volaJle due to the overall fluctua]on in business performance and its impact on the bo,om line.

•  The financial leverage effect has itself been of varying impact but has contributed posi]vely in all years. In 2012, it helped to propel LuWhansa’s ROE by 13.7%.

•  ROIC minus net cost of debt a:er tax has been posiJve for all years, indica]ng that the company‘s investments have been genera]ng a sufficient return.

•  However, given that financial leverage has been massively building up from 75% to 325%, LuWhansa has to be careful not to let the cost of debt outweigh it‘s ROIC, because otherwise the financial leverage effect will drama]cally swing in the opposite direc]on.

Return On Equity 2010 2011 2012 2013 2014 ROE (Return On Equity) 13.71% 0.05% 25.65% 5.34% 1.86%

Financial Leverage Effect 2010 2011 2012 2013 2014 ROIC 9.49% 3.45% 10.32% 3.49% 1.87% Net cost of debt (aWer tax) 5.52% 2.88% 3.54% 2.44% 0.89% ROIC -‐ Net cost of debt 3.97% 0.57% 6.78% 1.05% 0.98% * Financial Leverage 75.18% 80.48% 201.88% 138.44% 324.16% = Financial Leverage Effect 2.98% 0.46% 13.69% 1.45% 3.18%

Note: As we were conserva]ve in our analysis and included pension liabili]es in net debt because they represent a long-‐term financial burden, this approach overes]mates the financial leverage effect since pension liabili]es are not interes]ng-‐bearing debt.

Residual Income Analysis and Peer Comparison


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2010 2011 2012 2013 2014

LuWhansa Residual Income

ROE Cost of Equity

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-‐60%

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2010 2011 2012 2013 2014

ROE Comparison

ROE LH ROE AF

•  LuWhansa is only creaJng value for its shareholders in two years (2010 and 2012) even though its cost of equity is declining.

•  Yet, Lu:hansa’s ROE outperforms Air France. The posi]ve ROE of Air France in 2014 is in fact misleading as Air France had both nega]ve net income and nega]ve shareholder’s equity in 2014.

fahmi

Note

ROE with negative NI and equity is meaningless

Risk Analysis

Short-‐term Liquidity Risk

•  The short-‐term liquidity posi]on of LuWhansa has been deteriora]ng over the five year period.

•  In 2013 and 2014, LuWhansa is not able to cover their Current Liabili]es with Current Assets. The main reason for the sharp fall was a reducJon of cash and short-‐term investments by around €2bn from 2013 to 2014. The money was mainly used to reimburse long-‐term obliga]ons and other financing ac]vi]es. This also explains the dras]c decline of the Cash ra]o in 2014.

•  The latest decline of the CFO to short-‐term debt raJo is partly explained by decreasing CFO due to the new deprecia]on method for aircraW as well as low net income for the last repor]ng period.

•  In conclusion, short term liquidity could be at risk.


Short-‐term liquidity raJos 2010 2011 2012 2013 2014 Current ra]o 105,4% 96,6% 100,4% 88,4% 75,2% Quick ra]o 98,7% 90,3% 93,8% 82,6% 68,8% Cash ra]o 59,7% 45,1% 53,2% 47,1% 29,1% CFO to short-‐term debt ra]o 30,5% 24,1% 29,2% 30,0% 18,0%

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120%

2010 2011 2012 2013 2014

Current ra]o Quick ra]o Cash ra]o CFO to short-‐term debt ra]o

Long-‐term Liquidity Risk (1/2)

•  As previously explained, financial leverage has more than quadrupled due to low interest rates pushing up LuWhansa’s pension liabili]es.

•  While it appears that long-‐term debt has been reduced, the declining raJo is mostly explained by increasing total liabiliJes due to increased pension liabili]es.

•  The solvency ra]o is nega]vely affected by both declining shareholder’s equity as well as increased liabili]es. Consequently, the solvency raJo more than halved over the five year period.

•  Because of the company’s high financial leverage and the low solvency ra]o, long term liquidity risk cannot be neglected.


0% 50% 100% 150% 200% 250% 300% 350%

2010 2011 2012 2013 2014

Long-‐term debt / Total Liabili]es Short-‐term debt / Total Liabili]es

Financial Leverage Solvency ra]o

Long-‐term liquidity raJos 2010 2011 2012 2013 2014 Long-‐term debt / Total Liabili]es 29,7% 29,0% 25,1% 21,0% 20,3%

Short-‐term debt / Total Liabili]es 4,7% 3,2% 4,1% 6,8% 3,0%

Financial Leverage 75,2% 80,5% 201,9% 138,4% 324,2% Solvency ra]o 28,8% 29,0% 17,2% 21,2% 13,4%

Long-‐term Liquidity Risk (2/2)

•  The Net Debt to EBITDA raJo has reached criJcal levels in 2014, reflec]ng the large increase in pension liabili]es. The debt to CFO ra]o has likewise increased to significant levels. Yet, since pension liabiliJes are non interest-‐bearing debt, the interest coverage raJos are sJll at acceptable levels.

•  The build up of debt, however, is reflected in an overall decline of interest coverage ra]os.

•  The raJng agencies evaluate Lu:hansa as a rather risky investment. While S&P s]ll considers LuWhansa to be investment grade, Moody’s indicates LuWhansa to be of specula]ve nature. However, we should note that Moody’s has a posi]ve outlook for their ra]ng.

Solvency Risk 2010 2011 2012 2013 2014

Interest Coverage ra]o 4.01 2.68 4.36 2.46 2.75

Interest Coverage ra]o (Cash) 8.65 8.18 7.64 9.51 7.09

Debt to EBITDA 2.06 2.59 2.82 3.23 5.73

Debt to CFO ra]o 2.10 2.75 3.44 2.57 6.61


RaJng Agency (May 2015) RaJng Outlook

Moody’s Investors Service Ba1 Posi]ve

Standard & Poor’s BBB-‐ Stable

Conclusions

Strengths and Weaknesses


•  Strong investment on its fleet, which contributes in appealing to premium customers and in offering a diversified route network in terms of volume and geography.

•  Although net sales have slowed down due to the nega]ve pricing environment, sales volume and passengers are in increasing.

•  The LuWhansa brand s]ll carries a great reputa]on . •  Its results compare favorably in the peer analysis with

other established carriers; less so for new genera]on airlines.

•  Revenue growth has been subdued in the last two years. •  Income statement items and profitability raJos have

been extremely volaJle in the past. •  Legacy costs of an old company as evidenced in the

unfavorable cost structure, declining margins and the high number of employees.

•  Fairly high financial leverage and significant long-‐term pension liabili]es that depress future flexibility.

•  ROIC -‐ WACC and ROE -‐ Cost of Equity are both not sa]sfactory; in recent years, Lu:hansa has not been able to consistently create value for its stakeholders.

•  Net PPE / Gross PPE is around 50%: while the fleet can not yet be considered old, high replacement investments have to be made.

•  Both liquidity and solvency risk are elevated.

Strengths Weaknesses

Recommenda]ons


Seek renegoJaJons with pilots and employees to reduce the risk of strikes, which has harmed opera]ng performance in the past.

Improve sales-‐recollecJon policies in order to get money from clients sooner, thus reducing receivable accounts. This would have a posi]ve effect in available cash, reducing liquidity risks.

Focus on quality: concentrate on LuWhansa’s high-‐yielding Business and First Class segment on long-‐haul flights. In 2014, it generated 42.2% of long-‐haul revenue in Business and First Class.

Promote the split company approach (i.e., use Germanwings for domes]c flights and the soon-‐to-‐be launched Eurowings for long-‐haul economy flights), in order to achieve cheaper cost structure.

Renew efforts to reduce costs further in order to achieve posi]ve opera]ng margins and to return value for shareholders.

Appendix: Peer Company Air France – KLM

Air France Financials 2010 2011 2012 2013 2014 Net Revenue 23310 24363 25423 25520 24912 Net Income 289 -‐809 -‐1225 -‐1696 -‐185 EBIT 634 -‐480 -‐731 -‐227 751 Effec]ve corporate tax rate 0,00% 24,00% 0,00% 0,00% 0,00% Shareholders' Equity 6094 4980 3637 2293 -‐632 NOPAT 634 -‐364,8 -‐731 -‐227 751 NOPAT Margin 2,72% -‐1,50% -‐2,88% -‐0,89% 3,01% Capital Employed 17836 17561 15362 13656 12275 Capital Employed Turnover 1,31 1,39 1,65 1,87 2,03

ROIC 3,55% -‐2,08% -‐4,76% -‐1,66% 6,12% WACC 7,00% 7,40% 7,70% 7,40% 7,10% ROIC – WACC -‐3,45% -‐9,48% -‐12,46% -‐9,06% -‐0,98%

ROE 4,74% -‐16,24% -‐33,68% -‐73,96% 29,27% Cost of Equity 13,00% 13,30% 14,60% 15,00% 15,40% ROE – Cost of Equity -‐8,26% -‐29,54% -‐48,28% -‐88,96% 13,87%

•  Air France – KLM was selected as the most appropriate choice for our peer analysis for the following reasons: •  It is an established airline that offers similar products

as LuWhansa (short-‐haul and long-‐haul flights). Moreover, it has a comparable history and legacy costs. Furthermore, Air France – KLM has a similar fleet size and the third highest passenger volume.

•  Interna]onal Airlines Group was created through a merger of Bri]sh Airways and Iberia in 2011. Thus, only limited data was available.

Rank Airline Passengers in 2014 Fleet DesJnaJons 1 LuWhansa Group 105,9 615 321 2 Interna]onal Airlines Group 88,4 520 248 3 Air France – KLM 87,4 574 231 4 Ryanair 86,4 319 186 5 easyJet 65,3 226 136

Largest European airlines:


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