Germany's Lufthansa profits triple, says crisis over

28th October 2010, Comments 0 comments

German flag carrier Lufthansa said Thursday it tripled its net profit in the third quarter, easily beating market expectations on the back of a robust economic recovery.

The airline said third quarter net profit came in at 628 million euros (868 million dollars), far higher than the 390 million euros forecast by analysts polled by Dow Jones Newswires.

Operating profit soared to 783 million euros, more than 500 million euros higher than during the same period last year, Lufthansa said in a statement.

"The good result is the consequence of the increasingly positive development of demand in passenger and freight traffic," it said, adding that in-house cost-cutting and synergy within its group of airlines had also driven profits.

"The Lufthansa Group has successfully flown through the economic and financial crisis," chairman and CEO Wolfgang Mayrhuber said.

The group also owns Austrian Airlines, Swiss, Britain's BMI as well as Germanwings.

In 2009, the company launched a drive to slash one billion euros in spending by the end of 2011, sparking tensions with staff including pilots, who went on strike in February.

But following that turbulence in the first quarter and major disruptions in the second due to the Icelandic ash cloud, the third quarter marked a resounding improvement.

On Wednesday, Lufthansa posted a nine-month net profit of 524 million euros, up from just 31 million euros a year earlier.

Lufthansa gave a sunny outlook for the remainder of the year -- barring an economic slowdown or a major hike in fuel prices.

The company now expects 2010 operating profit to exceed 800 million euros, driven mainly by a strong rebound in long-haul passenger and freight traffic as well as reduced costs.

It criticised government plans to introduce next year an air travel tax of eight, 25 or 45 euros, payable by passengers depending on the length of the flight, saying it could drive business to foreign airports.

The tax is part of a major austerity drive and is expected to raise around one billion euros per year.

Meanwhile, the company said Chinese authorities had approved three Lufthansa Frankfurt-Beijing flights per week on Airbus' huge A380 superjumbo, up from just one presently, with the new schedule to begin November 19.

A spokesman told AFP that Lufthansa hoped to eventually operate a daily A380 flight to Beijing.

"That remains our objective but for the moment we have agreed with the Chinese authorities to a gradual roll-out," he said.

Lufthansa already offers a daily flight from Frankfurt to Beijing on a Boeing 747 and in September started a weekly A380 flight on the same route.

© 2010 AFP

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