European price war squeezes Lufthansa hard

FRANKFURT AM MAIN, July 30 (AFP): European airline giant Lufthansa on Tuesday reported tumbling net profits in the second quarter, saying higher operating costs and a European short-haul price war ate into the bottom line.
Net profit at Lufthansa fell 70 per cent year-on-year in April-June, to 226 million euros ($252 million). "Persistent overcapacities, aggressive competition and increasingly price-sensitive demand" were clipping the group's wings, it said in a statement.
Operating, or underlying profit adjusted for special items was down less sharply, falling 25 per cent to 754 million euros, on revenues up four per cent at 9.6 billion.
Lufthansa highlighted a seven per cent increase in costs, including a fuel bill that had risen by 255 million euros compared with 2018's second quarter.
Those squeezed the group's adjusted operating profit margin by three per centage points, to 7.8 per cent.
The group, which includes the flagship blue-crane airline alongside no-frills Eurowings and smaller carriers like Austrian and Swiss, is "responding to this by further reducing our costs and increasing our flexibility," said chief financial officer Ulrik Svensson.
The no-frills branch booked an adjusted operating loss of 273 million euros in the second quarter, worse than the 220 million in April-June last year.