Eurowings drags down earnings at Lufthansa Group

Eurowings drags down earnings at Lufthansa Group

Lufthansa Group achieved an adjusted EBIT of €2.4 billion for the first nine months of 2018 – a 7.7 per cent decline on the prior-year period.

The drop was primarily attributable to the integration costs at Eurowings.

Adjusted EBIT margin for the period amounted to 8.8 per cent.

Nine-month results were also burdened by a €536 million rise in fuel costs, an increase in the costs incurred in connection with flight delays and cancellations, and higher maintenance expenses.

“We expect to see our full-year costs increase by more than €1 billion in 2018 due to fuel costs and the extra expenses incurred from delays and cancellations alone,” said Carsten Spohr, chairman of Deutsche Lufthansa.

“But despite this, we achieved an adjusted EBIT of €2.4 billion for the first three quarters of this year, the second-best nine-month result in our history.

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“And had it not been for the losses at Eurowings, we would have posted another record earnings result.

“This is a clear testament to our sustainable financial strength – a strength that we have demonstrated even under challenging conditions this year.”

Lufthansa Group generated total revenues of €26.9 billion in the first nine months of 2018.

Total revenues increased by six per cent on the prior-year period, while traffic revenues were up seven per cent.

“Future growth in the air transport sector will need to pay far more regard to the capacities of the infrastructure in the air and on the ground,” Carsten Spohr observed.

“At the same time, we aim to secure the profitability of our airlines through capacity discipline. We also expect the substantial rises in fuel costs to lead to higher ticket prices from 2019 at the latest.”

According to current market expectations, airlines in Germany are likely to expand their capacities by over ten per cent for the 2018/19 winter timetable period, a development that is still being driven by the demise of airBerlin.

The airlines of Lufthansa Group, however, will raise their capacity by a more modest eight per cent, and will further reduce their capacity growth to 3.8 per cent for the 2019 summer timetable period.