Reduced fuel costs and seating capacity control have in part contributed to boosting Deutsche Lufthansa AG’s profits for 2015, the German airline said on Thursday, reluctant however to predict improved earnings for 2016, citing industry challenges ahead.
Share prices in the company fell by more than 6 percent on Thursday, despite the news that its net income had increased to 1.7 billion euros in 2015, much higher than the 55 million euros posted the year before with revenue up by 6.8 percent to 32.1 billion euros. At the same time, however the Cologne-based group, which has seen a part of its short-haul business market share go to low cost carriers, also said expenses were higher than expected due to strikes and lower passenger loads.
“With the Germanwings tragedy, 2015 was an emotionally very challenging year for the Lufthansa Group,” said Deutsche Lufthansa AG chairman of the Executive Board & CEO Carsten Spohr.
“The numerous strikes were a further burden. Nevertheless, we continued to successfully work on our Group’s future viability. And our strategic realignment is progressing well.”
Lufthansa is currently restructuring in efforts to cut costs and restore competitiveness amid a highly aggressive market.
“For 2016 we are aiming to increase our result for the Lufthansa Group again,” Spohr adds. “We aim to enhance the profitability of our hub airlines by further modernizing their fleets and further increasing efficiency. We will only grow capacity where our cost structures are competitive. We will expand Eurowings substantially and enlarge the route network. We will foster innovations in all business areas and make travel for our customers even more pleasant and simpler through digitalization and corresponding new offers.”