Lufthansa profits hit by strikes and price drop
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Strike action and a dip in ticket prices has seen Lufthansa post a weaker second quarter than expected.
The German airline saw a 17% drop in operating profit in the second quarter to EUR359 million (US$480m), with net profit down 32% to EUR173m.
For the first half of the year the carrier saw an operating profit of EUR114m, up EUR41m year-on-year, but reported a net loss of EUR79m.
The pilot strike action in April cost the group EUR60m, while over capacity especially in Europe, North America, South America and Asia Pacific had seen its prices drop. The airline is also suffering from Venezuela’s failure to pay fees.
Earlier this year Lufthansa set out a transformation plan for its survival, which culminated in a new WINGS concept.
It has forecast a full-year operating profit of EUR1 billion, pushing to EUR2bn in 2015.
“For the full year 2014, we are confirming our profit guidance, despite the unusual adverse developments in the second quarter. This quarterly performance was shaped by a number of one-off effects, such as strikes and currency devaluations. At the same time we have presented a comprehensive work programme with quality, growth and innovation initiatives, which we will drive forward with great determination. In doing so, we are also forging the right path for strengthening the Lufthansa Group’s competitiveness and future viability,” says Simone Menne, Chief Officer Finance & Aviation Services of Deutsche Lufthansa AG.
Lufthansa and Germanwings saw a first half operating result of a EUR146m loss while Austrian posted a EUR44m loss and SWISS saw a EUR92m loss.
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