On Tuesday morning, the Luxair Group held its annual press conference in Niederanven at which it released its Activity Report 2015 and its 2016 Outlook.

Paul Helminger, Chairman, said that 2015 had been a good year for Luxair Group but that it had faced various challenges, including from Lufthansa which has divested itself in Luxair shares and had initiated its own routes to Munich and to Frankfurt. He also talked about the streamling of the fleet, with the last Embraer jet to be gone by August and the remaining fleet to be focused on both Bombardier Q400s and Boeing 737s.

Adrien Ney, the CEO, stated that the actual nett result for 2015 for the group was €9.7 million (identical to 2014), against a budget of €5.9 million. This positive result came on the back of various negative issues, including terrorist attacks, but was boosted by a positive economic growth.

He admitted that the airline is facing a challenging future with increased competition from low-cost airlines and legacy carriers now operating out of Luxembourg airport; but Luxair is still the main driver of Luxembourg airport's growth. The Frankfurt route (now closed) gained Luxair 140,000 passengers in 2014.

Capacity rose 11% and passenger numbers also rose by 11%, with significant increases on two relatively new routes: Dublin 56% and Stockholm 88%. The overall load factor was 66%.

However, LuxairTours had an averse year in 2015 in what he described as a very complex environment with a difficult geopolitical context and terrorist threats in relation to some of Luxembourg's key destinations. While passenger numbers grew 1%, the number of packages sold fell 7%, yet flight-only sales rose 13%, with a 76.1% load factor (78.6% in 2014).

LuxairTours EBIT was €3.9 million, compared to €10.1 million in 2014.

LuxairServices noticed a significant increase in 2015, with an 8.8% in the number of passengers handled, to 2.7 million passengers. The number of aircraft handled rose by 3% in 2015, to 41,600. The total number of meals provided in 2015 rose 7% to 1.984 million. However, a second handling agent will start at Luxembourg airport in September 2016, increasing competition.

LuxairCargo has continued to invest €5-7 million annually for the past five years on infrastructure and achieved a solid EBIT of €2.7 million in 2015 (€1.7 million in 2014).

In 2015 it handled an incease of 5% in air freight, with a similar increase in aircraft movements to 5,292. It recruited an additional 79 staff in 2015.

2016 Outlook

LuxairCargo: 246,000 tonnes of cargo was handled from Jan to April, leading to an estimate of 800,000 tonnes for the year, up 5%, with 150 new staff expected to be hired by the end of June 2016.

LuxairTours: 2016 will be a very challenging year for LuxairTours, with the tour operator being able to stabilise figures so far this year. With a 72% load factor in 2015, the

2016 figure in the first four months has been 75%. The main focus for growth will be the German market. There has been a 32% increase in flight-only sales with a 6% increase in passengers so far in 2016. However, terrorist threats in Europe have undermined passengers' confidence; the tour operator will focus more on traditional European destinations as Turkey passenger numbers have dropped 67% and those travelling to North Africa have fallen by 47%, while passenger numbers to Spain and Portugal have risen by 20%. Another effect of the terrorsit attacks and threats is that tour operators have cut their margins, with LuxairTours no different. 2016 will see the group undertaking an in-depth review of its business model.

Luxair: For Luxair, the fleet and network are being consolidated with new destinations to Prague and increased capacity to Portugal. The airline saw a 2% increase in passenger numbers for the first four months of the year, with overall numbers expected to be similar to those in 2015 with the total figure at 1,789,260. The move to a 100% Bombardier Q400 fleet is expected by September this year.

Overall, the group's strategy over the past four years has proved to be successful, with a progressive increase in passenger numbers. Plans are also afoot for a new Technics Maintenance Hangar and a ne wCatering Hangar and fleet planning for beyond 2020, with both Luxair and LuxairTours positioning themselves to be prepared for ever-increasing competition.

Photo by Geoff Thompson (L-R): Martin Isler; Adrien Ney, CEO; Paul Helminger, Chairman; Laurent Jossart