Lufthansa cuts profits outlook

German airline Lufthansa today lowered its full-year profit forecasts as a result of the economic slowdown and higher fuel costs.

German airline Lufthansa today lowered its full-year profit forecasts as a result of the economic slowdown and higher fuel costs.

The company said it now anticipated operating profits of €1.1bn against an earlier forecast of €1.4bn.

The airline reported operating profits of €279m for the third quarter to the end of September, down from €599m in the same period last year, while net profits fell to €149m from €586m.

The results came as the airline announced it was to take control of UK carrier bmi, in a deal which will make Lufthansa the second-biggest carrier behind British Airways at Heathrow.

Lufthansa already had a 30% stake in bmi (formerly British Midland) and the German carrier is buying a further 50% stake for around £318m (€400m).

There are currently more than 500 weekly Lufthansa flights to eight German cities from airports in the Republic of Ireland and the UK. As well as Heathrow, it uses London City, Birmingham, Bristol, Manchester, Newcastle, Edinburgh and Dublin.

In the first nine months of the year Lufthansa generated total revenues of €18.6bn, a year-on-year increase of 13.6%.

Traffic revenues rose by 17.9% to €15bn in the same period, attributed to increased passenger figures and the consolidation of Swiss International Airlines.

But the group said operating expenses rose to €18.9bn during the first nine months, mainly as a result of the rise in fuel costs to €4.1bn. This was equivalent to an increase of 48.9%.

The operating profit for the year to date was €984m, €101m less than for the same period last year.

Lufthansa chairman and chief executive Wolfgang Mayrhuber said the group was working on its productivity and measures to improve fuel reduction and control external costs.

He added: “This is a respectable result taking into consideration the considerable strains being felt as a result of the ongoing crisis in the financial markets and the overall economic situation.

“During these critical times, our focus is naturally on safeguarding our result. We possess the necessary flexibility and operational adaptability, and will be able to steer our company according to the demands of the market.”

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