Lufthansa profit climbs

In spite of what was termed a damaging series of strikes, the Lufthansa Group made a net profit of €1.78bn (about £1.5bn, $1.91bn) for 2016, a 4.6% increase over the previous year.

Annual revenue fell by 1.2% to €31.66bn as traffic revenue dropped by 3.3%. Operating expenses were 5.3% lower at €31.75bn, with fuel costs down by 15.5% and staff costs by 8.9%.

Although staff numbers rose by 3.1% during the year, the group said costs were reduced partly by a change to retirement and transitional benefits for cabin crew at Lufthansa mainline. This led to a saving of €652m over the year.

The group carried 109.7m passengers in 2016, a year-on-year increase of 1.8%. Capacity, in available seat km (ASK), rose by 4.6% as larger aircraft were introduced on certain routes.

Lufthansa said capacity growth was particularly strong to the Americas, but shrank in the Middle East and Africa region. Europe and Asia capacity growth was in line with the average.

A cause for concern was the push by low-cost airlines into the higher-value business travel segment, such as Ryanair into Lufthansa’s Frankfurt hub, which, Lufthansa said, “puts severe structural pressure on the airlines in the group”. 

www.lufthansagroup.com

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