Lufthansa reduces planned growth for 2019 | Fin24

Lufthansa reduces planned growth for 2019

Nov 13 2018 16:01

Lufthansa Group achieved adjusted earnings before interest and taxes (EBIT) of €2.4bn for the first nine months of 2018 – a 7.7% decline on the prior-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 €536m rise in fuel costs, an increase in the costs incurred in connection with flight delays and cancellations, and higher maintenance expenses.

"We expect to see our full-year costs increase by more than €1bn in 2018 due to fuel costs and the extra expenses incurred from delays and cancellations alone," said Carsten Spohr, chair of the Executive Board and CEO of Deutsche Lufthansa AG.

"But despite this, we achieved an adjusted EBIT of €2.4bn 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."

For Spohr this is a clear testament to the group's sustainable financial strength.

Lufthansa Group generated total revenues of €26.9bn in the first nine months of 2018. Total revenues increased by 6% on the prior-year period, while traffic revenues were up 7%.

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%.

“Future growth in the air transport sector will need to pay far more regard to the capacities of the infrastructure in the air and on the ground,” said Spohr.

"At the same time, we aim to secure the profitability of our airlines through capacity discipline. We also expect the substantial rises in fuel costs to lead to higher ticket prices from 2019 at the latest."

The network airlines – Lufthansa, SWISS and Austrian Airlines – further improved on their record earnings of 2017, raising their aggregate nine-month adjusted EBIT by another €13m to just under €2bn. The driver behind this development was SWISS, which achieved a nine-month adjusted EBIT of €525m, 18.8% above its prior-year level.

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