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Lufthansa cuts profit forecast

• 7 hours ago
 
• From the sectionBusiness

 

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Lufthansa has cut its full-year profit target following a sharp decline in long-haul bookings to Europe.

Germany's biggest airline blamed "terrorist attacks in Europe" and "greater political and economic uncertainty".

It cut its full-year profit forecast for 2016 from "slightly above previous year" to "below previous year".

British Airways owner IAG and Easyjet have also issued profits warnings in recent weeks.

And earlier this month the International Air Transport Association (IATA) saiddemand for air travel had been hit.

"After a very strong start to the year, demand growth is slipping back toward more historic levels,"said IATA's chief executive, Tony Tyler.

"A combination of factors are likely behind this more moderated pace of demand growth. These include continuing terrorist activity and the fragile state of the global economy.

"Neither bode well for travel demand. And the shocks of Istanbul and the economic fallout of the Brexit vote make it difficult to see an early uptick," he added.

'Greater uncertainty'

In its statement, Lufthansa said advance bookings, in particular on long-haul routes to Europe had "declined significantly", since it made its original profit forecast in March.

It also said it would now increase the number of seats it offers by 5.4% this year instead of its previous target of 6%.

Immediately after last month's vote by the UK to leave the European Union, BA's parent company IAG said the decision could dent profits.

Meanwhile, rival Easyjet said the vote meant "additional economic and consumer uncertainty is likely this summer" and it expected revenues to fall as a result.