Lufthansa Sees Profit Fall Again

Lufthansa’s overall operating profit fell in the third quarter as continued pressures impacted the airline’s ability to succeed.

The German flag carrier’s operating profit was USD 1.41 billion, which aligned with expectations; however, it did represent a fall of almost 10% year over year.

While having fundamental problems, Lufthansa expected this result to shape up the way it has done after a positive third quarter and conclusion to the summer season, but it also struggles.

What’s Happening At Lufthansa?

So, just what is happening at Lufhtansa that is making the airline struggle so badly? Firstly, aircraft delivery delays are plaguing the carrier.

From types across Airbus and Boeing families, Lufthansa has been unable to take delivery of the aircraft it desires on time. Worse still, schedules continue to balloon out, making forecasting hard.

If it’s not delivery delays, it’s also major certification issues, such as those on the Boeing 777X, that make future planning difficult.

To mitigate the impact being felt because of this, Lufthansa is being forced to retain older, less fuel-efficient aircraft such as the A340, 747-400, and even, at times, A380 in a bid to ensure it can still have solid levels of capacity.

By retaining these aircraft, however, the airline also states that it’s losing hundreds of millions, and with no end in sight to many of these troubles, concerns are continuing to rampage.

Away from delivery delays, the airline has seen expenses rise after sorting out labour deals with key employee bases, which means it needs to cut expenses where possible.

The airline executives have also highlighted less-than-ideal punctuality across its key German hubs, which has impacted its overall on-time performance and completion rate.

Others would argue that a lack of investment and fundamental decisions that have proven wrong have left Lufhtansa as a damaged brand that is not favoured like it once was.

Revenues Soar At Lufthansa

Despite a drop in overall operating profit, revenues were solid, with 10.7 billion euros representing the strongest third-quarter performance in company history.

However, the results are hardly a shock, with many airlines across the industry repeatedly seeing record revenues and other underlying issues that need sorting.

Looking into the fourth quarter, Lufthansa is expecting solid demand, with bookings remaining high year over year. However, the airline will need to stabilise other elements of the business to ensure success can truly be felt.

Furthermore, a turnaround process is already underway, with a big priority on making sure that the company becomes once more the flagship of Germany and also an airline people are proud of. Executives have openly admitted in the last 12 months that the airline isn’t at this point currently, and things must change.