Lufthansa ‘con­fi­dent’ de­spite tough mar­ket

Kuwait Times - - BUSINESS -

Ger­man air­line Lufthansa said yes­ter­day that its net prof­its had al­most dou­bled in the third quar­ter, boosted by a pen­sions deal with cabin staff. Net prof­its soared to 1.42 bil­lion eu­ros ($1.5 bil­lion) be­tween July and Septem­ber. Last month, Lufthansa raised its profit fore­cast for the year, after record­ing bet­ter than ex­pected de­mand from busi­ness trav­el­ers in Septem­ber.

More than 700 mil­lion eu­ros of pro­vi­sions the group had set aside flowed into its re­sults this quar­ter after it reached a deal to move from de­fined-ben­e­fit to de­fined-con­tri­bu­tion pen­sions for cabin crew.

Ex­clud­ing such ex­cep­tional items, the group recorded an oper­at­ing profit of 1.15 bil­lion eu­ros, down 6.3 per­cent com­pared with the third quar­ter in 2015. “The Lufthansa group is de­vel­op­ing with sta­bil­ity in a dif­fi­cult mar­ket en­vi­ron­ment,” chief ex­ec­u­tive Carsten Spohr said in a state­ment. “We are re­spond­ing to the price pres­sures in the air trans­port sec­tor with con­sis­tent ca­pac­ity and cost dis­ci­pline.” Con­fi­dent in its per­for­mance in the fi­nal months of the year, Lufthansa had al­ready in­creased its an­nual fore­cast in late Oc­to­ber.

Based on its ad­justed oper­at­ing profit for the first nine months of 1.68 bil­lion eu­ros, the group said it aimed to achieve a full-year per­for­mance “ap­prox­i­mately on the pre­vi­ous year’s level”-when the same mea­sure stood at 1.8 bil­lion eu­ros for the full 12 months. Lufthansa Group, which in­cludes Aus­trian Air­lines, Swiss, and low-cost Eurow­ings, car­ried 32.7 mil­lion pas­sen­gers be­tween July and Septem­ber. That was an in­crease of al­most 600,000 com­pared with the same pe­riod in 2015, some of which the firm put down to an in­crease in busi­ness book­ings in the tra­di­tion­ally busy month of Septem­ber. But rev­enue shrank to 8.83 bil­lion eu­ros, a slight de­crease of 1.2 per­cent com­pared with the third quar­ter last year.

Lufthansa laid plans to ex­pand its ca­pac­ity in the third quar­ter, aim­ing to com­plete its ac­qui­si­tion of Brus­sels Air­lines and lease 40 air­craft from strug­gling Ger­man com­peti­tor Air Berlin. Both moves are de­signed to strengthen Eurow­ings, which booked a 35mil­lion-euro loss in its ad­justed earn­ings be­tween Jan­uary and Septem­ber com­pared with a 60-mil­lion-euro profit over the same pe­riod in 2015.

The low-cost sub­sidiary suf­fered a day of strikes by cabin crew last week, re­call­ing waves of walk­outs that in­flicted heavy costs on Lufthansa dur­ing 2015. Over­all, the group said it would slow the growth in its ca­pac­ity over the rest of the year “to help fur­ther sta­bi­lize the pric­ing en­vi­ron­ment”. — AFP

FRANK­FURT: A plane of Ger­man air­line Lufthansa pre­pares to land at the air­port in Frank­furt am Main, west­ern Ger­many yes­ter­day. — AFP

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