Lufthansa slashes profit forecast over increase in competition

 
Adam Hignett
GERMAN airline Lufthansa yesterday slashed its profit outlook for 2015 as increased competition and a fall in global growth forecasts took its toll.

Europe’s largest airline by revenue reported higher than expected third-quarter results, but said it expected its 2015 operating profit to be only “significantly above” the €1bn (£788m) for 2014, compared with a previous forecast for €2bn.

“These are tense times for the air industry and tense times for Lufthansa,” chief executive Carsten Spohr told analysts and journalists, citing risks from Ebola and a weaker economic outlook for next year as well as the dispute with pilots.

The airline’s chief executive also said he would stand firm in the row with pilots over early retirement benefits and an expansion in its low-cost operations, even after eight walkouts by staff this year wiped off €160m from operating profits.

Before yesterday’s warning, analysts had on average predicted operating profit of €952m for 2014 and €1.5bn in 2015, according to a Reuters poll.

The market reacted badly to the warning, with its shares plummeting 6.61 per cent in Frankfurt to close at €11.52.