German airline Lufthansa lifts 2016 profit guidance after strong September
BERLIN — German airline Lufthansa increased its profit target for the year after business bookings proved better than expected in September and its decision to cut back the amount of seats it planned to offer this year paid off.
Lufthansa said on Wednesday it now expects 2016 adjusted earnings before interest and tax (EBIT) to be roughly on the level of last year, when it made just over €1.8 billion ($2 billion), against a previous forecast for a drop.
The upgrade comes in contrast to profit warnings this month from low-cost rivals Ryanair and easyJet, whose greater exposure to Britain make them more vulnerable to weakness in the pound, which has tumbled since the country’s June vote to leave the European Union.
Lufthansa Group, which also includes carriers Swiss, Austrian and Eurowings, had said in July it expected adjusted EBIT to fall this year after attacks in Europe deterred leisure travelers and weighed on bookings, especially on long-haul routes to Europe.
However, last- minute bookings for September, especially from business customers, were better than expected, the carrier said in an unexpected statement. Adjusted EBIT for the first nine months of the year was roughly stable at € 1.68 billion, against €1.69 billion for the same period in 2015.
Lufthansa said it now expects revenues to fall 7%- 8% in the fourth quarter, against its previous estimate for an 8%-9% drop.
It cautioned that longer-term bookings for long-haul routes to Europe were still being affected by traveler caution. “Forecasting short-term bookings, therefore, remains challenging and may lead to significant volatility in earnings going forward,” it added.
Lufthansa is due to release full results on Nov. 2. —