Latest Aviation News Air transport LUFTHANSA STOCK DIPS ON MUTED 2019 OUTLOOK

Lufthansa stock dips on muted 2019 outlook

AFP
14/03/2019 | 382 words

Shares in Lufthansa fell sharply Thursday, after Europe's largest airline group reported a drop in profits for 2018 and warned that capacity bumping up against limits at overcrowded airports would hem in growth this year.

Net profits at the Frankfurt-based group amounted to 2.2 billion euros ($2.5 billion), down 8.0 percent year-on-year.

Disruption to air traffic, higher fuel costs and the pricey acquisition of large parts of defunct competitor Air Berlin all weighed on the result, Lufthansa said, outweighing a 6.0-percent boost in revenues to 35.8 billion euros.

Shares in the group plunged by more than five percent to 21.68 euros in midday trading in Frankfurt, making Lufthansa the worst performer on a blue-chip DAX index down 0.12 percent.

Looking ahead to 2019, Lufthansa's executives said they had cut back their targets for capacity growth, or increasing the number of seats available, as infrastructure bottlenecks at airports and air traffic control make adding new flights a challenge.

In summer, Lufthansa's capacity will be 1.9 percent higher than last year -- half the increase previously announced.

"Overall, the signals we are getting from air traffic control are worrying," chief executive Carsten Spohr told reporters, warning that German air traffic control staff wasn't growing fast enough to keep pace with projected rises in flight traffic.

He also cautioned that not enough was being invested to modernise airport infrastructure.

"We can't afford these operational bottlenecks and technological backlogs in a globally competitive industry," Spohr said.

Over 2019, Lufthansa expects revenues to grow by between four and six percent.

But it sees its operating margin likely slipping from the 7.9 percent recorded in 2018, giving a range of 6.5 percent to 8.0 percent for 2019.

Fuel prices are expected to increase further this year after rising 850 million euros in 2018, when the group also booked 518 million in costs for delayed and cancelled flights.

Finance director Ulrik Svensson promised to "further enhance our cost efficiency" after achieving the third annual reduction in outlays in a row.

2018's result was also burdened by 170 million euros over the first three quarters from the integration of Air Berlin into Lufthansa's low-cost arm Eurowings -- a process the group says is now complete.

 
 
 
 
Related articles

Lufthansa warns airport capacity to squeeze growth

Lufthansa orders 40 long-haul jets from Airbus, Boeing

Lufthansa soars to record profits in 2017

Lufthansa outflies Ryanair in Europe's skies

23/05 MRO: AAR's maintenance activities at full capacity
23/05 Factory 4.0 working for MOC
23/05 StandardAero invests in France for turboprop engines
23/05 FAA chief says no 737 MAX fix yet ahead of fence-mending summit
23/05 NYCO is now supplying Air France HOP's Embraers, CRJs and ATRs with its Turbonycoil 600 oil
22/05 China Eastern seeks payout from Boeing over 737 MAX
13 HOURS AGO
MASWINGS, a regional subsidiary of Malaysia Airlines, has selected AFI KLM E&M for the component support of its fleet of ten ATR72-500s. Repairs will be provided by SINGAPORE COMPONENT SOLUTIONS (SCS), the new shop of AFI KLM E&M in partnership with Sabena Technics.
17 APR 2019
S7 TECHNICS has become the MRO provider in Russia and the CIS to perform base maintenance checks on the Airbus A320NEO. The aircraft is operated by S7 Airlines and is powered by two Pratt & Whitney's PW1127 engines. The maintenance work was conducted at the company's Moscow Domodedovo airport site and included the 7500 FH / 5000 FC / 24-month 1С-check.
15 APR 2019
AFI KLM E&M has entered into an exclusive maintenance agreement with VIVA AIR GROUP that includes the support of airframe components and logistical services. The implementation of this contract with the low-cost airline based in Colombia and Peru will be provided by BARFIELD, a subsidiary of AFI KLM E&M based in Miami (Florida).
11 APR 2019
DASSAULT AIRCRAFT SERVICES (DAS) has opened its Stuart Service Center at Witham Field Airport (KSUA). With 2,300 m, it is twice the size of the former Florida satellite service centre of the DASSAULT FALCON JET's MRO subsidiary, which was located in West Palm Beach. It will perform 12 to 36 month inspections on Dassault Falcon aircraft, host a GoTeam and offer FBO services.
10 APR 2019
(MRO Americas) PRATT & WHITNEY confirmed that DELTA TECHOPS will be part of the worldwide network of approved GTF maintenance centers (PW110G-JM and PW1500G in its case). The Atlanta center becomes the third approved in the United States, alongside the facilities of the engine manufacturer in Columbus and West Palm Beach.
ALERTAVIA, the News platform for Aerospace and Defense industry Professionals.

Featured Content
AFI KLM E&M steps up a gear on CFM's LEAP
Sabena technics finally gets back on-board C-130Hs
Airbus and Thai Airways to launch a new joint venture MRO facility at U-Tapao
How Thai Airways will Expand Rolls-Royce's Trent Engine Service Network
China embarks on board aircraft recycling
LATEST NEWS   CIVIL AEROSPACE   MRO & SUPPORT   AIR TRANSPORT   DEFENCE   SPACE
Follow us
© 2019 Le Journal de l'Aviation - All rights reserved

By continuing to use the site, you agree to the use of cookies. You can find out more by following this link.  OK  Find out more