Lufthansa upbeat on pricing, helped by North Atlantic routes
German carrier reports slightly better than expected profit for second quarter of year, but trims its growth plans again
Lufthansa has trimmed its growth plans again. Photograph: Christof STACHE/AFP/Getty Images
Lufthansa said it was more positive on ticket prices for the rest of the year after it reported slightly better than expected profit for the second quarter of the year, though it trimmed its growth plans again.
The carrier said on Tuesday it now expected a slight increase in unit revenues, thanks to good demand on North American routes in particular, against a previous forecast for the measure of pricing to be stable.
“With continuing strong demand, we are confident that, despite a challenging prior-year basis for comparison, we will be able to report solid revenue trends for the second half of 2018, too,” CFO Ulrik Svensson said in a statement on Tuesday. However, it maintained its guidance for adjusted earnings before interest and tax to fall slightly from 2017’s record level of €2.97 billion.
Lufthansa once again reduced its forecast for capacity growth this year, to 8 percent from 8.5 per cent, as like rivals it battles strikes and bad weather, plus also dealing with rapid expansion at its Eurowings budget brand. It said it took longer than expected to bring around 70 planes from collapsed rival Air Berlin up to its standards, meaning they spent more time on the ground than expected, thus causing delays and cancellations.
Integration costs for Eurowings reached €120 million in the first half of the year, and it expects a further €50 million in the third quarter. Eurowings will not be profitable this year, but is instead targeting a return to the black next year, Lufthansa said.
Lufthansa reported second quarter adjusted EBIT of €982 million, against expectations of €942 million. – Reuters