Lufthansa Group has said it is likely to make lower-than-expected profits in 2015 due to weakening global growth and “fierce competition” driving down ticket prices.
Europe’s largest airline group had been predicting an operating profit of €2 billion for next year but this forecast has been reduced to “significantly above result of 2014”, which is set to be an operating profit of around €1 billion.
Lufthansa said that it was on target to meet its profits’ target for 2014 despite losing €170 million due to industrial action by employees in recent months.
CEO Carsten Spohr said of the industrial disputes: “We must find solutions - in the interests of all our employees, our customers and our shareholders - that will ensure the long-term viability of our company for the decades ahead.
“We cannot afford to overlook this vital priority in our current collective labour agreement negotiations either.”
The group, which also includes Swiss, Austrian Airlines and Brussels Airlines, made an operating profit of €849 million for the first nine months of 2014, which was an increase of €186 million on the same period last year despite the strikes.
This was despite a 0.6% fall in the group’s total revenue to €22.6 billion for the first nine months of 2014 as the company operated 2.2% fewer flights during the period.
Simone Menne, Lufthansa’s chief financial officer, said the results were a “sound achievement in a difficult and highly competitive market environment”.
“When we look ahead, though, we can see that the economic slowdown and the continuing declines in our passenger yields in the face of such fierce competition will affect our operating scope in the year ahead,” said Menne.
“This is why we need to modify our projections for 2015, even though we expect it to produce an operating result that is significantly above this year’s.”