Lufthansa Risks €2 Billion Higher Fuel Expenditure as War in Iran Drives Prices Up

Lufthansa Group posted solid profitability in the July-September quarter on Tuesday, as rising revenue and cost cuts more than offset the impact of higher fuel prices. The company’s adjusted operating profit rose 6% year-on-year to €1.4 billion, including the high summer period. The group posted its best-ever revenue quarter with revenue increasing 9% to €12.24 billion.Despite the increased fuel costs of around half a billion euros, we were able to more than offset the rise in fuel costs with rising revenues in the face of persistently high demand and strict cost discipline’, Lufthansa CEO Carsten Spohr said in a statement.

The company said it saw a €543 million year-on-year increase in fuel expenses in the third quarter, driven by a steep surge in paraffin prices from the Middle East crisis. The network carriers of Lufthansa Group boosted capacity at a modest level. SWISS, Austrian carriers and Brussels Airlines all improved their quarterly performance. But Lufthansa’s main airline performed poorly, with adjusted operating profit down a third to €300 million in the third quarter.

Lufthansa Cargo more than tripled its adjusted operating profit to €162 million and Lufthansa Technik boosted its adjusted operating profit by 54% to €200 million, broadly supporting the group results overall.

The impressive quarterly results contrast with the first nine months, when revenue grew 8% but net profit plunged 35%.

Lufthansa has previously reduced flights and grounded planes to save money. In April, the group removed the unit’s 27 flying aircraft from its schedule and also announced cuts that would affect 20,000 short-haul flights through October.

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