Lufthansa reports 9% decline in Q3 profit as core brand struggles

BERLIN (Reuters) -German airline group Lufthansa on Tuesday reported a year-on-year fall in its operating profit in the third quarter, as its flagship carrier Lufthansa struggles with low yields, competition with international airlines and spiralling costs.

The German group reported a third-quarter operating profit of 1.3 billion euros ($1.41 billion), largely in line with the expectations of analysts polled by the company, but 9% lower than a year earlier.

The third quarter, which includes the busy summer months for travellers, is usually the strongest for airlines. But rising costs, unpredictability tied to the crisis in the Middle East and plane delivery delays continue to weigh on results.

Lufthansa’s passenger airlines generated an operating profit of 1.2 billion euros in the third quarter, down from 1.4 billion in the same period of 2023. The decline was driven mainly by a 234-million-euro decline in the result of its core brand Lufthansa Airlines, the company said in a statement.

The group has launched a turnaround programme at its core brand in an effort to recover after a difficult earnings year to date.

By 2026, the measures will have a gross effect on operating profit of around 1.5 billion euros, according to the company.

Lufthansa confirmed its outlook for the full year, targeting group operating profit in a range of 1.4 to 1.8 billion euros, and maintaining 8% as a mid-term target for its operating profit margin. Analysts have cast doubt on whether this can be achieved by 2026.

The profit margin for the 2024 financial year is expected at 4.3%, according to a company-led analyst consensus.

($1 = 0.9251 euros)