Lufthansa cuts 2014 and 2015 profit targets

Airline now expects operating profit of €1bn in 2014

Lufthansa says that competition from Middle East and low-cost carriers has forced it to cut its profit targets for the next two years. Lufthansa shares dipped 16% on the news.

The warning also hit other European legacy airlines, with Air France-KLM losing 6% and IAG, which owns British Airways and Iberia, 4.5%.

The announcement came as something of a surprise, as Lufthansa had posted better-than-expected results in May. But it now expects operating profit of €1 billion in 2014, down from its earlier forecast of €1.3 billion to €1.5 billion. Its 2015 earnings target is now €2 billion, not €2.65 billion.

“There is overcapacity in the North Atlantic,” head of finance Simone Menne said pointing to problems with pricing for business and first-class seats on European and US routes, where airlines have recently been increasing the number of seats available. There are also weakness in Lufthansa’s cargo operations.


[pictured: Lufthansa 747-8 Intercontinental]


Check Also

Norwegian, transatlantic, low-cost, long-haul, South America, Argentina, company, business, domestic, Buenos Aires

Norwegian breaks speed record

A New York to London flight smashes the transatlantic record.

Ryanair’s cabin baggage rules change

Passengers no longer able to carry two cabin bags on board

Billund Airport looks ahead to busy 2018

Western Danish airport smashes new records for 2017

Lufthansa beats Ryanair as Europe’s top airline

Lufthansa Group as a whole carried 130 million passengers in 2017

Bergen two new routes, Billund one

Air France and Wizz Air announce fresh expansions

TORP, Sandefjord, lufthavn, airport, passengers, rise, increase, Rygge, low-cost, Ryanair, power, Oslo

Oslo Torp: 35% more passengers

Record year for Oslo’s second airport