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Berlin / AFP
German airline Lufthansa said on Wednesday that its net profits had almost doubled in the third quarter, boosted by a pensions deal with cabin staff. Net profits soared to 1.42 billion euros ($1.5 billion) between July and September. Last month, Lufthansa raised its profit forecast for the year, after recording better than expected demand from business travellers in September.
More than 700 million euros of provisions the group had set aside flowed into its results this quarter after it reached a deal to move from defined-benefit to defined-contribution pensions for cabin crew.
Excluding such exceptional items, the group recorded an operating profit of 1.15 billion euros, down 6.3 percent compared with the third quarter in 2015.
“The Lufthansa group is developing with stability in a difficult market environment,” chief executive Carsten Spohr said in a
statement.
“We are responding to the price pressures in the air transport sector with consistent capacity and cost discipline.”
Confident in its performance in the final months of the year, Lufthansa had already increased its annual forecast in late October.
Based on its adjusted operating profit for the first nine months of 1.68 billion euros, the group said it aimed to achieve a full-year performance “approximately on the previous year’s level” — when the same measure stood at 1.8 billion euros for the full 12 months.
Lufthansa Group, which includes Austrian Airlines, Swiss, and low-cost Eurowings, carried 32.7 million passengers between July and
September.
That was an increase of almost 600,000 compared with the same period in 2015, some of which the firm put down to an increase in business bookings in the traditionally busy month of September.
But revenue shrank to 8.83 billion euros, a slight decrease of 1.2 percent compared with the third quarter last year.
Lufthansa laid plans to expand its capacity in the third quarter, aiming to complete its acquisition of Brussels Airlines and lease 40 aircraft from struggling German competitor Air Berlin. Both moves are designed to strengthen Eurowings, which booked a 35-million-euro loss in its adjusted earnings between January and September compared with a 60-million-euro profit over the same period in 2015.
The low-cost subsidiary suffered a day of strikes by cabin crew last week, recalling waves of walkouts that inflicted heavy costs on Lufthansa during 2015.
Overall, the group said it would slow the growth in its capacity over the rest of the year “to help further stabilise the pricing environment”.