Tuesday, 30 October 2018

German airline Lufthansa reduces its planned growth for 2019

The German airline Lufthansa reduces its planned growth for 2019.

The German Lufthansa Group achieved an Adjusted EBIT of EUR 2.4 billion for the first nine months of 2018 – a 7.7 % decline on the same period last year period which is primarily attributable to the integration costs at Eurowings. 

Adjusted EBIT margin for the period amounted to 8.8%. Nine-month results were also burdened by a €536 million rise in fuel costs, an increase in the costs incurred in connection with flight delays and cancellations, and higher maintenance expenses.

Carsten Spohr, Chairman of the Executive Board & CEO of Deutsche Lufthansa AG, said “We expect to see our full-year costs increase by more than €1 billion in 2018 due to fuel costs and the extra expenses incurred from delays and cancellations alone. But despite this, we achieved an Adjusted EBIT of €2.4 billion for the first three quarters of this year, the second-best nine-month result in our history. And had it not been for the losses at Eurowings, we would have posted another record earnings result. This is a clear testament to our sustainable financial strength – a strength that we have demonstrated even under challenging conditions this year.”

Lufthansa Group generated total revenues of  €26.9 billion in the first nine months of 2018. Total revenues increased by 6 % on the prior-year period, while traffic revenues were up 7%. As a result of the first-time adoption of the new IFRS 15 accounting standard, the reported growth of total revenues to €26.9 billion was only 0.5%, while the reported traffic revenues declined by 1 percent to € 21.1 billion.

Unit costs for the period remained stable excluding fuel and currency effects, despite the extraordinary expense. Unit revenues excluding currency effects increased 0.3%. The airlines of Lufthansa Group transported some 108.5 million passengers in the first three quarters of 2018, a new record volume. Nine-month seat load factor was also at a record high of 82%. The exceptionally strong capacity growth for the period, which was driven by the insolvency of Air Berlin, will be substantially lower in 2019.