Lufthansa warns on profits, to take control of BMI

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German airline Lufthansa today lowered its full-year profit forecasts as a result of the economic slowdown and higher fuel costs.

The company said it now anticipated operating profits of €1.1 billion (£0.9 billion sterling) against an earlier forecast of €1.4 billion (£1.1 billion).

The airline reported operating profits of €279 million for the third quarter to the end of September, down from €599 million in the same period last year, while net profits fell to €149 million from €586 million.

The results came as the airline announced it was to take control of UK carrier bmi, in a deal which will make Lufthansa the second-biggest carrier behind British Airways at Heathrow.

Lufthansa already had a 30 per cent stake in bmi (formerly British Midland) and the German carrier is buying a further 50 per cent stake for around €318 million.

There are currently more than 500 weekly Lufthansa flights to eight German cities from airports in the UK and Ireland. As well as Heathrow, it uses London City, Birmingham, Bristol, Manchester, Newcastle, Edinburgh and Dublin.

In the first nine months of the year Lufthansa generated total revenues of €18.6 billion, a year-on-year increase of 13.6 per cent.

Traffic revenues rose by 17.9 per cent to €15 billion in the same period, attributed to increased passenger figures and the consolidation of Swiss International Airlines.

But the group said operating expenses rose to €18.9 billion during the first nine months, mainly as a result of the rise in fuel costs to €4.1 billion. This was equivalent to an increase of 48.9 per cent.

The operating profit for the year to date was €984 million, €101 million less than for the same period last year.

PA

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