Lufthansa expects drop in annual profit after the terrorist attacks in Europe

German airline Deutsche Lufthansa expects a decline in profit for the year because of the series of terrorist attacks that forced many travelers to give up their travels, reported Wall Street Journal.

Europe was hit by a series of terrorist attacks which may affect flight bookings until the end of the year. Last week in Nice died 84 people, been run over by a truck. A few weeks earlier airport “Ataturk” in Istanbul was hit by a terrorist attack. Both incidents are linked to supporters of the “Islamic state”. The terrorist organization has also claimed responsibility for the attack on German train passengers this week.

In a statement on Wednesday, the largest airline in Germany announced that reservations, especially over longer distances to Europe decreased significantly because of the terrorist attacks in Europe and largely because of political and economic uncertainty that led to the change of the original estimate, that the company made in March. Expectations are for revenues from tourists to fall significantly in the third quarter, says Bloomberg.

Earlier this year the airline revised the estimated growth in line with appeared problems, including weak demand from Latin America.

Lufthansa expects revenue from July to December to fall by between 8 and 9%. The company reported a revenue of $15 billion euros in the first half of the year, which is a decrease of 2,6% compared to the same period of 2015.

At the same time, Lufthansa lowered its forecast for the year because of adjusted earnings before interest and taxes. Previously, the airline expected the adjusted EBIT to be “slightly above” the results of the previous year, but new expectations are profits to fall below last year.

In the early trading on the Frankfurt Stock Exchange shares of the company dropped by 6.4%. YTD price falls by 29%.

 

 

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Bob Sanders
Bob is with Wings Journal from the very beginning. Besides writing news here, he likes to do plane spotting during the weekends and tries to get better at photography.

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