German airline Lufthansa downgraded its profit forecast for the second time in 2024 and warned of a weaker quarter for due to high costs, Reuters reported.
The airline issued the warning on Friday, highlighting concerns of a weaker financial quarter as Lufthansa struggles with high labour and operating costs and weak average revenue per passenger due to ticket price pressure. Earlier in April, Lufthansa released a first-quarter profit warning amid rising strike-related costs. It also cited inefficiencies in flight operations at Lufthansa and Cityline and delays in aircraft deliveries.
Lufthansa stock dropped 3.8 per cent and pulled down IAG (ICAG.L), owner of British Airways, by 2.7 per cent, easyJet by almost 1 per cent and Air France-KLM (AIRF.PA), by almost 2 per cent at 12:13 GMT.
The group expects adjusted earnings before interest and tax (EBIT) in 2024 to be between €1.4 billion and €1.8 billion, down from the previous target of €2.2 billion. The group’s adjusted profit fell by more than a third to €686 million in the second quarter. Results for the second quarter will come out on 31 July.
In the statement, the company said it was launching a comprehensive restructuring programme that would affect its Lufthansa brand and regional carrier Cityline, adding that its core brand had been particularly affected by negative market trends.
The equity analysts said Lufthansa’s decision came as no surprise given its cost problems and delivery delays from aircraft makers Airbus and Boeing. In addition, earlier this week Lufthansa told its employees to cut operating costs due to increased competition and lower unit revenues due to a decline in corporate travel.
