Despite suffering costly long-running strike troubles, Lufthansa unveiled a net profit of €1.78bn last year, coasting into 2017 thanks to "effective cost reductions".
In 2016, Lufthansa’s revenues declined 1.2 per cent to about €31.7bn from €32bn. Adjusted earnings before interest and tax (Ebit) also decreased by 3.6 per cent to €1.75bn.
Net profits rose 4.6 per cent to €1.78bn.
The German airline expects adjusted Ebit to edge down "slightly" from €1.75bn this year; analysts had expected a bigger slide.
It took a €100m hit from strike costs.
Earnings per share increased 3.8 per cent from €3.67 to €3.81.
Why it’s interesting:
The airline has just announced a pay deal in a long-running dispute with pilots, which it said has improved its outlook. The ongoing strike action has caused significant trouble for the airline; it lost about €100m in strike-related costs last year, with thousands of cancelled flights and more than 100,000 affected passengers.
On Wednesday, Lufthansa and the union settled on an agreement, including a 10-year pay deal, more flexible working hours and defined contribution pensions. The pilots’ pay will increase to a total 11.4 per cent up until June 2022, when the last contract expires.
Lufthansa also invested €2.2bn last year, about €300m less than the company had originally planned. The airline has focused on cutting costs "in a very demanding market environment".
What Lufthansa said:
Carsten Spohr, chairman of the executive board and chief executive of Lufthansa said:
In 2017, it remains necessary to further reduce our costs.
This is the only way to meet and master the decline in unit revenues and the higher fuel expenses, and at the same time to maintain and strengthen our financial stability and our investment capacities.