German airline group Lufthansa restored dividend payments after operating profit jumped 55 percent in 2015 thanks to low fuel prices and a busy year for travel demand, it said on Thursday.
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It has also emphasized that booming passenger business was also involved in its gains previous year which was marked by the tragic crash of a plane from its subsidiary Germanwings as well as a series of strikes by its pilots and crew.
Lufthansa reined in earnings expectations for this year saying it faces tough cut-price competition.
Lower kerosene prices spurred earnings across the airline industry a year ago, proving particularly beneficial to Lufthansa and Air France-KLM Group, Europe’s biggest airline, which has also suffered a spate of strikes over a new short-haul strategy.
Thomson ReutersLufthansa CEO Spohr addresses a news conference at the company’s headquarters in FrankfurtFRANKFURT (Reuters) – Lufthansa said issues with the new engine of its A320neo plane are not fully fixed and as a result it was not ready to put more of the revamped Airbus jets into commercial service.
Revenue grew 6.8% to just over €32 billion.
Looking to the current year, Spohr said “we are aiming to increase our result for the Lufthansa group again”.
Spohr said Thursday that lower fuel costs and efforts to reduce flying with empty seats had paid off. The airline is restructuring to compete with low-cost carriers in Europe and what it says are government-subsidized Gulf carriers.
But he stressed that “business-wise, 2015 was a very good year” and promised investors a dividend of 50 cents per share.
“We are committed to making continuous dividend payments to our shareholders in the years ahead”.
Mr Spohr said he expected underlying earnings to “increase slightly”.
But the group warns that the MRO division’s earnings are set to “significantly decline” in 2016 as a result of “increased cost pressure” and expenditure for “growth projects”.
As well as the Lufthansa brand, the group owns Swiss and Austrian Airlines and low-priced carriers Eurowings and Germanwings. It adds that this forecast doesn’t include any earnings impact from possible strikes.
“But cost discipline remains one of our paramount tasks. It’s a change in booking trends”, she said. We must lower the unit costs at our hub airlines.
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Shortly before midday (1100 GMT), the share was still showing a loss of 5.9 percent at 14.38 euros.
