Lufthansa Group has cut its full year earnings guidance following a market-related decline in yields and challenges posed by delayed aircraft deliveries. It adjusted its previous EBIT estimate of €2.2bn down to around €1.4-1.8bn. The outlook is largely dependent on the earnings development at Lufthansa Airlines and Lufthansa Cargo's important fourth quarter.
In addition, adjusted free cash flow is expected to be significantly below €1bn, with it previously estimating at least €1bn.
On a preliminary basis, Lufthansa Group reported an adjusted EBIT of €686 million in the second quarter of the year, down from €1.1bn in the same financial period last year. Market-related decline in yields in all traffic regions - particularly in Asia - had a negative impact on the result. Adjusted free cash flow of Lufthansa Group amounted to €573 million.
Its quarterly profit was significantly lower than last year's €515 million, reporting a second quarter profit of €213 million. In addition, it recorded a half-year loss of €427 million, whereas its first half last year had a profit of €149 million.
""Lufthansa Airlines is particularly affected by the challenges posed by the negative market trend and by inefficiencies in the flight operations of Lufthansa and Cityline, also due to delayed aircraft delivery,"" the company read in a statement. ""It is becoming increasingly challenging for Lufthansa Airlines to break even for the full year.""
The group said it will ""counteract"" the issues with a ""comprehensive turnaround programme"". The details of the programme have not been disclosed.
It added, though, that its other airlines in the group as well as Lufthansa Technik and Lufthansa Cargo's earnings for the second half of the year are set to be broadly the same as - or in some cases higher than - the previous year.
The company will provide more details on its financial outlook when it publishes its final results for the second quarter at the end of July.
Lufthansa Group cuts full year earnings guidance
