Lufthansa outlook

Flying Into the Storm

Lufthansa is suffering from over-capacity in the airline industry.
  • Why it matters

    Why it matters

    The crises currently affecting the airline industry are likely to last for a long period, meaning airlines must change to survive.

  • Facts


    • Over-capacities, fierce competition and terrorism concerns are all hitting airline revenues.
    • Lufthansa’s adjusted profits fell by 8.3 percent between April and June.
    • The company’s shares fell 3 percent to €10.39 on Tuesday and are down about 27 percent since the start of this year.
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Ever since he took the helm at Lufthansa two years ago, crises have loomed large on Carsten Spohr’s radar. A suicidal pilot who killed 150 people, striking staff and terrorism across Europe have all required careful navigation.

Now he may be facing his biggest challenge yet: Restructuring Europe’s largest airline at a time when terrorism, turmoil in Turkey, the Brexit vote and cutthroat competition are all taking the airline industry into uncharted territory.

But he is still confident. “We’re moving forward in the areas which we can control,” he said as he released the airline’s first-half results on Tuesday. The figures suggested his team has made inroads in the restructuring effort. Adjusted EBIT jumped by 13 percent to €529 million in the first six months of the year, and the costs per passenger per kilometer decreased by 1.3 percent.

The second-quarter figures were not so positive. Adjusted EBIT fell by 8.3 percent between April and June and unit costs increased by 1 percent. The airline’s chief financial officer, Simone Menne, contended that this is the consequence of one-time effects. “Our airlines’ cost discipline is good, therefore unit costs will decrease in the third quarter,” she said.

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