Lufthansa Expected to Forecast Profit Recovery
June 19, 2002
German airline Lufthansa is expected at its general meeting in Cologne on Wednesday to finally provide precise guidance for the year after previously refusing to give earnings targets.
Frankfurt's analysts widely expect the company to again post strong profit, after a disastrous 2001, forecasting operating profit of 350 million to 450 million euros.
Company CEO Jürgen Weber has so far said only that the company's results would be better than last year's.
The airline's catering unit LSG Sky Chefs, largely responsible for the company's record loss last year of 754 million euros, continues to weigh down results. The company's core operation, in contrast, is seen as recovering well, according to the analysts.
The airline's passenger volume for May was only 5.7% lower than in the same period a year ago and the company's freight operations in May posted the first upturn in a year and a half.
Lufthansa's other problem is the cut-rate competition. Ireland's Ryanair, which lacks presence at Lufthansa's hubs, is less of a problem than the growing possibility that Easyjet could take over primary Lufthansa rival Deutsche BA, sparking a price war that could cut into Lufthansa's bottom line.