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Lufthansa lowers 2019 targets over 'low-cost' competition

Lufthansa lowers 2019 targets over 'low-cost' competition

The announcement of 700 flight cancellations on Thursday and roughly 600 on Friday came after a Frankfurt labour court denied Lufthansa's request for an injunction to block the strike. (AFP/Daniel ROLAND)

BERLIN: German airline group Lufthansa said on Sunday (Jun 16) it has revised lower its 2019 outlook due to intense competition from low-cost carriers in Europe.

It now expects the group to reach an operating margin of between 5.5 to 6.5 per cent, compared with an earlier estimate of 6.5 to 8.0 per cent, Lufthansa said in a statement.

The revision corresponds to an operating profit of between €2.0 to €2.4 billion (US$2.24 -US$2.7 billion). The outlook also factors in a fuel cost increase of €550 million.

Lufthansa stressed that "long-haul business continues to be strong, in particular on transatlantic and Asian routes".

But long-haul, it added, "only partially offsets yield pressure in European short-haul business," especially in Germany and Austria.

On its low-cost competitors, Lufthansa has accused them of being ready to accept considerable losses in order to expand their share of the market.

Lufthansa plunged into the red in the first quarter of this year, but as of April was still sticking to its annual targets, which it has now been pressured to change.

Source: AFP/de

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