Lufthansa sees earnings slump in third quarter as costs rise
Sees Q3 adjusted EBIT below last year's 1.5 bln euros
Q2 net results 469 mln euros, down almost a half on year
CEO says demand strong, but price pressure intensified
Adds CEO comment on profit margins, yields in paragraph 9
By Ilona Wissenbach, Joanna Plucinska and Rachel More
BERLIN/LONDON, July 31 (Reuters) -Lufthansa LHAG.DE warned of a fall in third-quarter earnings on Wednesday as the German airlines group grapples with higher wage costs and a squeeze on ticket prices, pointing to tougher market conditions across the aviation sector.
Airfares around Europe and Asia have started to plateau or fall amid signs the post-COVID travel boom may be starting to lose steam just as many airlines are ramping up flights.
Ryanair RYA.I, Europe's biggest airline by passenger numbers, and Air France-KLM AIRF.PA reported plunging profits earlier this month, although easyJet EZJ.L fared better.
Lufthansa said it expected third-quarter yields - a measure of flight profitability - to fall by a single-digit percentage from 2023 levels, while unit costs are seen rising by a similar amount.
Chief Executive Carsten Spohr said demand had remained strong, but that "market-wide capacity growth intensified price pressure for the passenger airlines, causing yields to fall."
Delays in aircraft deliveries are also disrupting fleet management and driving up repair costs for older planes, while wages have risen for German staff after strikes that cost the group 100 million euros ($108 million) in the second quarter.
Overall, Lufthansa forecast third-quarter adjusted earnings before interest and taxes (EBIT) below the previous year's 1.5 billion euros, due to challenges at its main-brand passenger business Lufthansa Airlines.
Spohr later said on a call that the company would slow capacity growth later in the year, adding that competition with Chinese airlines in particular was hitting the German group as yields fall for Lufthansa on routes on which they compete.
"For us, yields are more important than growth," Spohr told an analyst call, adding that the company was still aiming to achieve an 8% EBIT margin, albeit one or two years later than previously expected.
Shares in Lufthansa, which had already cut its full-year profit target earlier this month for the second time this year, were little changed at 1019 GMT. The stock has fallen around 23% over the last six months.
For the second quarter, Lufthansa reported a group net result of 469 million euros, down almost half on the same period last year.
Spohr said a restructuring programme could help to turn around the group's fortunes, with a focus on modernisation.
($1=0.9239 euros)
Europe's airline shares dip in Q2 amidst rising costs https://tmsnrt.rs/4dr6XmH
Reporting by Rachel More, Joanna Plucinska, Ilona Wissenbach; Editing by Clarence Fernandez and Mark Potter
Aset Berkaitan
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
