Lufthansa avoids naming new profit outlook amid terrorist threat

Lufthansa shied away from specifying a new full-year profit outlook for 2016 nearly two weeks after revising it downward, saying uncertainty due to terrorist fears made it hard to get an idea of how many people would book flights in the near term.

Weak demand has led to shrinking ticket prices, chief financial officer Simone Menne said on a conference call on Tuesday.

Uncertainty over the political and economic developments around the world makes consumers cautious - they book their flights later or stay at home.

The airline surprised financial markets last month by saying it expected adjusted earnings before interest and tax (EBIT) to decrease this year and would only say that it was expecting to fall short of last year's figure of 1.8 billion euros (2 billion dollars).

"We will be able to give a clearer idea of the full-year forecast in the third quarter," Menne said. Analysts currently put that number at roughly 1.45 billion euros, 20 per cent less than the previous year.

"Despite the worsening conditions, we are still expecting the best operational results of all time," said Lufthansa chief Carsten Spohr on Tuesday in an attempt to soothe investors.

Menne, who will be leaving Lufthansa for the pharmaceutical company Boehringer Ingelheim at the end of the month, attempted to dispel concerns over fears that no dividend would be paid out this year.

The carrier said in July that it had revised its profit outlook downward because advance bookings, notably on flights to Europe, "have declined significantly, in particular due to repeated terrorist attacks in Europe and to greater political and economic uncertainty."

Last update: Tue, 02/08/2016 - 14:02
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