Airline Briefing: Lufthansa Sebastian Hollmeier, Director Network Planning FRA

Introducing Lufthansa Group …. Passenger Airline Group Germany: Lufthansa, Germanwings Switzerland: Swiss, Edelweiss Austria: Austrian Airlines Italy: Air Dolomiti Belgium: brussels airlines (45%) Turkey: Sun Express (50%) Aviation Services Lufthansa Technik Lufthansa Cargo LSG Sky Chefs Lufthansa Systems Lufthansa Consulting Lufthansa Financial Services

Lufthansa‘s Passenger Airlines Group Fleet More than 700 aircraft in service More than 200 aircraft on firm order, and more to come Global network 319 destinations 22.500 flights per week 460.000 seats per day Alliance / Partners Founding member of Star Alliance Joint ventures with United, Air Canada, All Nippon Airlines More than 200 additional codeshare destinations Summer 2013

Like most other airlines, Lufthansa is fighting to be profitable 2012 Turnaround program „SCORE“ Reduce cost Increase revenues Synergies within the group Target: 8% profit margin of each business segment Annual report

Our network strategy …

Fundamentally different production schemes of airline Point-to-Point Hub-and-Spoke B A H A B

Advantage of Hub-and-Spoke System: Bundling Passenger Flows For each destination multitude of markets connected Many destinations served – many more than viable for local traffic Even niche markets served efficiently Large and efficient aircraft in use High frequency of flights Providing even alternate travel options for large volume nonstop markets QUALITY + EFFICIENCY Hub-and-Spoke

Hub-and-Spoke system: Larger and more efficient aircraft in use Efficiency Long-haul A380 526 seats A330-300 221 seats Efficiency Short-haul A321 200 seats CRJ700 70 seats

Optimizing transfer flows in the Hub-and-Spoke system (I) The ideal flight plan 1. all flights arriving at the same time 2. all flights departing at the same time a little later Time of day ARR DEP

Optimizing transfer flows in the Hub-and-Spoke system (II) Example: Hub Frankfurt Summer 2013 Departing flights Morning Evening Arriving flights Summer flight plan 2013, typical day, including partner flights

Example: Today‘s most recent flights from FRA and MUC to BUD LH1338/13MAY, FRA – BUD, Arr. 14:10 LT 57 local pax booked from FRA, plus 133 transfer pax from 31 origins: LH1676/13MAY, MUC – BUD, Arr. 12:25 LT 44 local pax booked from MUC, plus 109 transfer pax from 36 origins: BCN BOS BRE DEN DFW DTW DUB EWR EZE GRU HAM IAD IAH JFK LAX LEJ LHR LUX MAD MIA OPO ORD OSL PHL SFO SIN TLS TSE YOW YVR YYZ AMS ATH BCN BHX BIO BLQ BOS BRE BSL CDG CGN CLT DUS EWR FCO FMO GOT GRU HAJ HAM IAD JFK LIS LYS MAD MAN MRS NCE RTM STR TRN TXL VRN WAW YUL YYZ Transfer pax of these two example flights only !

Our success: FRA is the leading hub in connecting European traffic FRA with 33% more European connecting passengers than PAR and AMS +33% +43% LH LH LX OS SN

MUC and FRA by far leading hubs in connecting INTRA-EUROPEAN traffic x1,5 x2 x5

Multi-Hub system of Lufthansa Group FRA MUC Frankfurt Munich Brussels Vienna Zurich

Advantages of Multi-Hub System  Offering attractive nonstop-services to Lufthansa group‘s hub airports Many destinations, high frequency, large and efficient aircraft  Offering multiple travel options for connecting markets Passengers‘ choice: Total travel time Preferred departure / Arrival time Brand preference and service Hub preference Seat availability (Promotional) Prices Lyons Beijing Frankfurt Munich Zurich Vienna

What does this mean for our route development? Other than some of our competitors, the Lufthansa Group does not allocate „top-down“ markets/destinations to hubs. Multiple connections to multiple hubs, even from smaller destinations, are desired as we believe in the benefits of the multi-hub-network. Every hub / every group airline should grow as much as commercially viable. Every hub/airline is responsible for its own profitability and network development. However, no route can be continued if not commercially viable. Adjusting the network is one aspect of our turnaround program „SCORE“.

Shaping the future together… Despite air travel taxes, fuel prices, high-speed trains and video conferencing the air transportation sector will continue to grow But it will change. Due to the competitive landscape and industry consolidation but even more so due to the general market trends: Our customers are more price sensitive than ever before And they still expect consistent high quality To be successful in the future we all have to make sure that we meet these customers’ demands We are ready – are you? With our fleet expansion we will continue to expand! We have plenty of ideas where to grow. But we do not have a rigid plan to follow, we are flexibly looking for opportunities

Shaping the future together… We do listen to our customers‘ needs, so that capacity can follow demand. But we also know very well, that capacity does create demand Keep in mind: Air traffic in general has a valuable macro-economic impact. But transfer airlines contribute by far the most to the local economy as they provide efficient connectivity to the whole world and serve corporate needs Together with you, we will have to develop joint business plans, which traffic flows to serve and stimulate Solid business cases are the key to success in this highly volatile industry! How can airports contribute? With an adequate (=lowest!) cost base, but still delivering quality for the customers Know how about market demand and revenue potentials to reduce financial risk Any form of (legal) support

Thank you for your attention! Questions?