Lufthansa 2016 profit forecast lowered to ‘below previous year’

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Lufthansa has warned that revenue is likely to fall to 15 billion euros ($16.5 billion) in the first half of 2016 and it has reduced its profit forecast for 2016 to ‘below previous year’.

The airline is predicting a weak second half of the year as long-haul traffic to Europe has been hit by political and economic uncertainty, as well as terrorist attacks on the continent. The Lufthansa executive board has lowered its adjusted earnings before interest and tax (EBIT) projections from ‘slightly above previous year’ to ‘below previous year’, despite the first six months of 2016 performing well.

Lufthansa will publish its first half results on 2 August and says EBIT has risen from 468 million euros in 2015 to 529 million this year. It says unit costs excluding fuel and currency effects were down 1.3 per cent, but the tariff settlement with the UFO flight attendants’ union, which is still subject to approval.

The rest of 2016 is predicted to be weaker, with unit revenues at constant currency predicted to fall between eight to nine per cent while unit costs excluding fuel and currency effects should decrease by two to three per cent. Lufthansa predicts fuel costs will decrease by about 350 million euros in the second half.