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Image: Lufthansa Group

Lufthansa soars to record profits, up 33%

The German giant’s fortunes are boosted by the Air Berlin bankruptcy and by ending a pilot dispute.

Lufthansa this morning posted record profits for 2017, rising by as much as 33.1%, rounding off a year that saw it end a long-running dispute with pilots and acquire parts of its former rival Air Berlin.

Net profits at the group, which includes Lufthansa, Eurowings, Swiss, Brussels Airlines and Austrian Airlines, reached €2.36 billion, even higher than forecasts predicted by industry analysts.

Carsten Spohr, whose contract as chief executive Lufthansa’s supervisory board extended for a further five years, gave a confident assessment of the group’s position.

“Our endeavours of the past few years are paying off,” he said. “We are lowering our costs where this does not affect the customer, and are simultaneously further investing in our product and service quality.”

Momentous year
The year’s events at the airline included settling a pay and pensions battle that had sparked multiple strikes by its 5,400 pilots, resulting in a €582 million one-off windfall for the accounts.

Profits were further boosted by the full integration of Brussels Airlines into the business after a final takeover in late 2016. A surge in the cargo business was also beneficial.

Revenues at the group grew 12.4% to €35.6 billion, while operating profit adjusted for special items was up 70% to almost €3 billion.

Adjusted operating profit for 2018 will be “slightly below” 2017’s level, the group said, especially as fuel costs are expected to rise by around €700 million.

“We will continue to consistently pursue our modernisation,” Spohr concluded. “And in doing so, we will retain our clear focus on reducing our costs and at the same time raising our quality. This is the only way to sustainably increase our profitability. From a position of strength, we will continue to drive consolidation in Europe.”

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