Lufthansa: Negative Eurowings Impact on RevenueJuly 31, 2018
The flight chaos with numerous delays and flight cancellations as well as the costs for the integration of Air Berlin machines at Eurowings have had an effect on the half-year result of the Lufthansa Group. According to Group information, adjusted operating profit in the first six months of just under 1.01 billion euros was below the previous year’s level. Total revenue remained virtually stable at around 16.9 billion euros.
Although the revenue of the low-cost subsidiary Eurowings increased in the first half of the year by 9.2 percent to 1.9 billion euros, the adjusted result fell to minus 199 million euros. This is mainly due to one-time effects from the integration of parts of the Air Berlin fleet, it says. This short-term expansion of capacity mainly resulted in higher expenses for technology as well as charter and leasing costs.
The Group expects that integration costs will ultimately impact earnings in the third quarter. Other costs were incurred because of flight delays and cancellations, the causes of which are mainly outside the Lufthansa Group.
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