Lufthansa lowers 2019 targets over 'low-cost' competition

[BERLIN] German airline group Lufthansa said Sunday it has revised lower its 2019 outlook due to intense competition from low-cost carriers in Europe.

It now expects the group to reach an operating margin of between 5.5 to 6.5 per cent, compared with an earlier estimate of 6.5 to 8.0 per cent, Lufthansa said in a statement.

The revision corresponds to an operating profit of between 2.0 to 2.4 billion euros (S$3.1 billion to S$3.3 billion). The outlook also factors in a fuel cost increase of 550 million euros.

Lufthansa stressed that "long-haul business continues to be strong, in particular on transatlantic and Asian routes".

But long-haul, it added, "only partially offsets yield pressure in European short-haul business," especially in Germany and Austria.

On its low-cost competitors, Lufthansa has accused them of being ready to accept considerable losses in order to expand their share of the market.

Lufthansa plunged into the red in the first quarter of this year, but as of April was still sticking to its annual targets, which it has now been pressured to change.

AFP