Deutsche Lufthansa AG reported a decline in profits over the summer despite strong ticket demand and record sales, the Cologne-based airline group announced on Tuesday.
Lufthansa announces cost-cutting as profit drops
Cost-cutting measures are now in the pipeline for its flagship Lufthansa Airlines brand, with the goal of boosting adjusted operating profit by €1.5 billion by 2026, according to CEO Carsten Spohr.
In addition to Lufthansa Airlines, the company owns subsidiaries Austrian Airlines, Brussels Airlines, Discover Airlines, Eurowings, and SWISS, as well as aircraft maintenance and service companies.
For the full year, Spohr reaffirmed an expected group-wide adjusted operating profit of €1.4 billion to €1.8 billion, despite lowering the annual financial target for a second time this summer.
During the typically busy third quarter, Lufthansa posted an adjusted operating profit of €1.3 billion, a 9% decline from the same period last year.
Lower ticket prices and rising costs offset revenue growth, resulting in a net profit of €1.1 billion, down 8% year-over-year.
Lufthansa Airlines specifically saw reduced profits, impacted by a shortage of new aircraft and increased personnel expenses.
To counter these challenges, Lufthansa plans to shift more flights to subsidiaries or partner airlines with lower operating costs and to increase automation across its operations.
