European Airline Industry -Germany: Lufthansa profits beat estimates despite strike

A Lufthansa Airbus 380 escorted by Eurofighters

German airline Lufthansa said profits jumped 30 percent in the third quarter despite a strike and higher fuel prices. The company's CEO said it wasn't enough, however, and vowed to intensify cost cutting.

The airline credited cost reductions it has already made for the profit, as well as better earnings from its services businesses such as repairing and catering other companies' planes.

CEO Christoph Franz called the results "respectable" but warned the company would need to be even leaner to deal with multiple challenges to its profitability. Those include higher fuel prices as well as competition from no-frills airlines and state-backed carriers in the Middle East. It must also pay costs imposed by governments, such as a German air traffic tax levied on every departure and the purchase of emissions trading certificates under a European Union program aimed at reducing global warming.
"We are making progress on the costs within our control. However that is not enough to earn adequate margins," he said, referring to profit margins, or the amount by which revenues exceed costs.

Net income rose to (EURO)642 million ($832 million) from (EURO)494 million in the year-ago quarter, beating analyst estimates for (EURO)225 million. Revenue rose 6.2 percent to (EURO)8.31 billion. Strikes by flight attendants between Aug. 31 and Sept. 7 cost the company (EURO)33 million.

Read more: FRANKFURT, Germany: Lufthansa profits beat estimates despite strike | National Business News | The Bellingham Herald