Lufthansa outlook and pay deal cheer market

Strong demand in US and Asia eases fears on ticket revenues

 Lufthansa pilot on strike  at Frankfurt Airport, Germany: Analysts have expressed concern that European airlines are engaging in a damaging battle for customers, putting more seats onto the market than there is demand for.  Photograph: Kai Pfaffenbach/File Photo/Reuters

Lufthansa pilot on strike at Frankfurt Airport, Germany: Analysts have expressed concern that European airlines are engaging in a damaging battle for customers, putting more seats onto the market than there is demand for. Photograph: Kai Pfaffenbach/File Photo/Reuters

 

Lufthansa announced a higher than expected 2017 profit target on Thursday, saying a rebound in demand in the United States and Asia and a breakthrough pay deal with pilots had improved its prospects.

The German airline said it expected adjusted earnings before interest and tax (EBIT) to fall only slightly from €1.75 billion in 2016: analysts had predicted a slump in underlying profits this year to €1.38 billion.

Lufthansa‘s shares jumped nearly 6 per cent to trade above €15 for the first time in a year thanks to the profit target and the pay deal ending months of strikes by pilots struck a day earlier.

The carrier said it still expected ticket revenues to fall this year, but not by as much as the 6 per cent drop in 2016, and that its fuel bill would rise by about €350 million to €5.2 billion.

But it said trading had been good in the first few months of 2017 thanks to a rebound in U.S. and Asia demand and that its cost base would improve thanks to the deal with its pilots, even though it would only have a positive impact on underlying profit from next year. – Reuters

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.