Lufthansa says headwinds set to slow growth

Marion Dakers
GERMAN airline Lufthansa has told investors to be patient with its recovery plans, with economic headwinds and rising costs likely to dampen growth this year.

Lufthansa said yesterday its revenues had grown 4.9 per cent to €30.1bn (£26bn) last year, though operating profits fell 36 per cent to €524m as restructuring and fuel expenses that rose almost a fifth to €7.4bn ate into its bottom line.

The flag carrier’s cost-cutting plans have improved earnings by a better-than-expected €618m this year, excluding one-off costs, the firm said.

“We should not get our expectations too high for 2013,” chief executive Christoph Franz said yesterday. “Our 2013 result shall have to bear the burden of the restructuring and project costs.”

Franz said in a separate statement that the firm’s fuel bill is expected to remain punishingly high this year, and a global economy “fraught with great uncertainty” will also dent Lufthansa’s earnings in 2013.

Lufthansa said it saw net profit declining this year from 2012’s €990m but did not provide a specific target. Analysts see net profit of €545m this year.

The firm is cutting 3,500 jobs, revamping low-cost carrier Germanwings and consolidating procurement and some back office functions.

The company aims to boost its operating profit to €2.3bn by 2015 through these measures.

Lufthansa also confirmed an order for more than 100 Airbus planes, which have a list price of $11.2bn.