By Joanna Plucinska and Ilona Wissenbach
LONDON (Reuters) -Lufthansa reported quarterly operating earnings slightly above expectations on Thursday and said the outlook for the fourth quarter was strong and demand set to improve, though bookings on the North Atlantic dragged on its further growth potential.
Shares were up over 5% in early trading on the back of the cautiously positive outlook.
This comes in the wake of the group’s promise of an ambitious turnaround plan, designed to cut costs and centralise operations across its complex multihub operation. It has also struggled to finalise a deal with unions to avoid a potential strike and recover its profits.
European airlines have largely dodged the substantial impact of a decline in travel from Europe to North America since U.S. President Donald Trump won the election in late 2024.
Lufthansa had previously warned that it could see some softness in demand, particularly in its transatlantic market, in the third quarter. In its results presentation it said the third-quarter demand softness was a “temporary setback.”
Analysts said the group was able to make up for soft demand with a strong Latin American market and premium bookings but Bernstein analyst Alex Irving stressed in a note that cost control was still essential for the group.
The group reported a third-quarter operating profit of 1.33 billion euros ($1.55 billion), a touch above the 1.32 billion euros projected by analysts polled by LSEG. That is down 1% from the same quarter last year, when it reported an operating profit of 1.34 billion euros.
Lufthansa also confirmed its 2025 forecasts for operating profit, or earnings before interest, taxes and special items, to be significantly above last year’s 1.6 billion euros.
The third quarter, which includes the busy summer months for travellers, is usually the strongest for European airlines.
“Even though we must continue to work intensively on the turnaround of our core business and the efficiency of our airlines, we can confirm our forecast of a significant improvement in earnings in 2025 today,” Chief Executive Carsten Spohr said in a statement.
Lufthansa has struggled to recover profits in recent years as it has dealt with spiralling costs and what analysts call great complexity in its group.
Delivery delays, particularly from planemaker Boeing, have not helped as it has been forced to continue operating older, less efficient equipment. Wednesday’s announcement of further delays to the Boeing 777X further hampers the group’s fleet renewal plans.
That has left its shares among the weakest in the European airline sector compared to its main competitors British Airways-owner IAG and Air France-KLM.
Still, the airline said it expected twice as many long-haul aircraft delivered in 2026 as this year and a continued reduction of its fleet.
(Reporting by Joanna Plucinska and Ludwig Burger; Editing by Kirsti Knolle, Muralikumar Anantharaman, Mrigank Dhaniwala and Tomasz Janowski)
