European Aviation Is Entering A Challenging Period

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Lufthansa group posted an adjusted EBIT loss of €336 million, compared to a positive €52 million in the same period last year. ASK and RPK have both grown at 6%,  leaving the load factor unchanged at 77.9%. The group blamed the worsening of the result on,

They also reminded investors about the bankruptcy of Air Berlin a year ago, which boosted profitability in Q1.

On the other hand, during the investor call Lufthansa claimed to have strong order books for the second quarter of the year, a reason why group’s yearly outlook remained unchanged. One of the signs of this is the designation of A340’s to fly on short-haul routes.

The French-Dutch group has posted a loss of €303 million in the first quarter, consequently announcing voluntary redundancies of 400 staff. Despite an impressive turnaround last year, Air France-KLM also lost money in the first quarter.

 All in all, the combination of high jet fuel prices, a stronger dollar and rapid ASK growth put significant pressure on the profitability of the major European carriers. The bankruptcies of Germania and WOW Air seem to prove that as well. Overall, the profits should increase in the second quarter, however the upcoming years could be quite challenging.

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                                                                                                                            Reported by Miss Vicky from Cargofee