Flag carrier ends third quarter with big gains | Business| Economy and finance news from a German perspective | DW | 31.10.2012
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Flag carrier ends third quarter with big gains

Germany's number-one airline, Lufthansa, has logged high earnings in the third quarter, surprising most analysts. Despite a strike by flight attendants and soaring fuel costs, the carrier has managed to do well.

German airline Lufthansa on Wednesday posted an unexpected 30-percent increase in net profit for the third quarter. The flag carrier said it earned 642 million euros ($830 million) in the period from July to September, beating most analysts' forecasts by a wide margin.

"The earnings contributions from our service segments were particularly helpful," Lufthansa Chief Executive Christoph Franz said in a statement.

Lufthansa is engaged in fixing planes, supplying in-flight catering and offering computer capacity to other airlines. Those businesses again proved much more profitable than carrying people and cargo.

Investors delighted

The carrier's higher profits overall came about despite a recent costly strike by flight attendants and rising fuel costs. Management identified low-budget airlines as a major threat to future profit margins.

"Ever growing low-cost airlines from the Middle East are challenging us in our core business segment," Franz said. "Both the ongoing crisis in the euro area and the persistently high oil price has a distinct effect on business performance."

Lufthansa's positive third-quarter results were immediately reflected at the Frankfurt Stock Exchange. The shares of the German carrier were the biggest gainers, jumping by more than 5.0 percent in early trading in an otherwise only modestly higher DAX-30 index.

hg/slk   (dpa, AFP)