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Lufthansa lifts profit target on bumper summer bookings
July 17, 2017 / 6:29 PM / 8 days ago

Lufthansa lifts profit target on bumper summer bookings

FILE PHOTO: Planes of the Lufthansa airline stand on the tarmac in Frankfurt airport, Germany, March 17, 2016.Kai Pfaffenbach/File Photo

BERLIN/FRANKFURT (Reuters) - German airline Lufthansa (LHAG.DE) increased its profit target for 2017 after a busy summer for bookings that has been boosted by demand on North American routes and a strong Germany economy.

The airline now expects its full-year adjusted earnings before interest and tax (EBIT) to exceed the 2016 level of 1.75 billion euros ($2 billion), it said in a statement on Monday, having previously expected the figure to fall slightly.

Analysts have been upgrading their forecasts for Lufthansa's earnings after positive comments on bookings, with the consensus now for adjusted EBIT of just over 2 billion euros this year.

Lufthansa's adjusted EBIT nearly doubled to 1.04 billion euros in the first six months of 2017, from 529 million in the year-earlier period, while revenue rose to 17 billion euros from 15 billion.

The airline said it expected a 100 million euro lift from lower fuel costs in the second half of the year. And a deal to lease 38 planes and crews from Air Berlin (AB1.DE) and the first-time consolidation of Brussels Airlines should make a small contribution to profit, it said.

Lufthansa also gave an upbeat outlook for its low-cost Eurowings unit.

"It is highly probable that Eurowings will achieve positive results this year," Chief Executive Carsten Spohr said on Twitter.

At the same time, the airline said it expected its unit revenues to decline in the second half of the year, after edging up by 1.8 percent in the second quarter.

Its finance chief Ulrik Svensson had cautioned in April that Lufthansa would chase volumes this summer.

Europe's other major airlines are also seen reporting strong quarterly financial results over the next couple of weeks.

Easyjet (EZJ.L) said earlier on Monday that it expected to report pleasing revenue trends when it publishes third-quarter results on Thursday.

Lufthansa is due to report full second quarter results on Aug. 2.

($1 = 0.8712 euros)

Reporting by Victoria Bryan and Maria Sheahan; editing by Alexander Smith

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