Lufthansa Group faces big dip in net profits during its restructuring program

Published on : Thursday, October 31, 2013

lufthansaA big dip in net profits in the first nine months of the year was seen by the Lufthansa Group despite a spike in its operating profit.

 

The group, which includes Austrian Airlines, Germanwings, Brussels Airlines and Swiss, recorded a net result of €247m in the January to September period, a year on year fall of €450m.

 

The group is going through a restructuring program and without these costs, it saw operating profit increase to €859m, up 47 per cent. However the reported result, with the costs taken into account, falls to €661m.

 

The carrier said it had “significantly improved” earnings from its passenger business following the transfer of Lufthansa’s short-haul flights to its low-cost subsidiary Germanwings. The offshoot now operates most of the services not feeding its Frankfurt hub.

 

Lufthansa AG chairman Christoph Franz said that for the first time in five years, they were in the black with Lufthansa’s European traffic – thanks to the progress with Germanwings.” He added that Austrian Airlines was back in profit. And this progress confirms the fact that they are on the right track

 

Lufthansa and Germanwings recorded a €300m operating profit, up 189m. Swiss made €182m, up €9m. Austrian took tentative steps back into the black, with €19m.

 

Lufthansa said that full year 2013 operating profit would be €600-700m, compared to €524m year on year. However, this is far below analyst’s expectations of €918m. The lowered forecast is blamed on unfavourable currency exchange rates and fuel prices.

 

 

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