Terrorists attacks force Lufthansa to cut 2016 profit target
Airline reports decline in long-haul booking due to ‘political and economic uncertainties’
Lufthansa: the German airline had forecast adjusted 2016 earnings to be slightly higher than 2015. It now predicts the opposite.
German airline Lufthansa is expecting a decline in full-year earnings, due to be released tomorrow.
The airline cut its full-year profit target following a sharp decline in long-haul bookings to Europe, which it attributed to a series of terrorist attacks.
Istanbul’s Atatürk Airport was hit by an attack in June, a truck driver in Nice killed at least 84 people in July, and there was an axe attack on train passengers in Germany. A bomb attack at Brussels Airport in March caused Lufthansa to delay plans to take over Brussels Airlines.
Lufthansa revenues for the first half of the year came in at €15 billion, against €15.4 billion for the same period in 2015, although adjusted earnings rose to €529 million from €468 million.
Below previous year
Lufthansa had forecast 2016’s adjusted earnings before interest and taxes to be “slightly higher” than 2015’s €1.82 billion. It has since said it expects adjusted earnings before interest and tax to fall to “below previous year”, as a result of the terrorist attacks, which have caused passengers to scrap travel plans.
“Due to increasing political and economic uncertainties, the executive board reduces forecast” for earnings before interest and tax (EBIT) in 2016 to “below previous year”, it said.
“Advance bookings, especially on long-haul routes to Europe, have declined significantly, in particular due to repeated terrorist attacks in Europe and to greater political and economic uncertainty”.