Lufthansa expects air fares to stabilise in the crucial summer months after recent pressure, thanks to good demand from Asia, North America and Germany, it said today, echoing comments from long-haul rivals and helping to boost its shares.
Lufthansa increased its annual profit target earlier this month and said it also now expected air freight arm Lufthansa Cargo to report a profit this year against previous expectations for a loss.
Budget unit Eurowings turned a profit in the second quarter and is on track to break even for the year, Lufthansa added.
European carriers including British Airways-owner IAG and easyJet have stepped up profit targets for the year on the back of booming summer demand.
However, budget carriers in particular have been cautious on pricing for the key late summer months, with many airlines adding capacity.
Lufthansa would be interested in leasing more jets and crew from struggling local rival Air Berlin
Lufthansa said that while it expected unit revenues to fall for the second half as a whole, they would be stable in the third quarter, making it slightly more cautious than IAG and Air France-KLM, which both forecast positive unit revenues for the second half.
Chief financial officer Ulrik Svensson said the group was seeing good demand from Asia and North America and was being helped by its home market of Germany, where the economy is in rude health.
He said advance bookings from September onwards were looking good, but that the group was being cautious for the fourth quarter given a good performance at the end of last year and that it did not yet have a clear view of bookings.
Svensson reiterated Lufthansa would be interested in leasing more jets and crew from struggling local rival Air Berlin, but that there were no definite numbers on the table.
He declined to say if Lufthansa, which has been expanding thanks to deals with Air Berlin and Brussels Airlines, had made a bid for struggling Alitalia, but said Lufthansa wanted to play an active role in Italy.
Lufthansa has been trying to bring costs down and a crucial part of that is a deal on pay and conditions with its pilots. Svensson said the contract was due to be finalised later this year.