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Lufthansa Group has announced that 2017 was the strongest financial year in its history. The German airline was able to capitalise on rivals Air Berlin’s collapse, with earnings before interest and taxes increasing by 70 percent.
This is the third year on the trot that the airline has posted record annual earnings. The airline is not, however, expecting 2018 to follow suit as foreign competitors target the German market.
Low-cost airlines EasyJet and Ryanair have already used the demise of Air Berlin to make their forays into Germany, filling the void left by Germany’s second-largest airline when it went bankrupt in October 2017.
Total revenues for the Lufthansa Group in 2017 amounted to EUR 35.6 billion. The Lufthansa Group also invested some EUR 3 billion in 2017, around a third more than in the previous year. “This is partly due to investments of some EUR 900 million into aircraft from the AirBerlin flight operations,” Lufthansa said in its annual report.
Net profits of the group — which includes Lufthansa, Eurowings, Swiss, Brussels Airlines and Austrian Airlines — added 33.1 percent to hit €2.36 billion, higher than the 2.28 billion predicted by analysts.
“Our endeavours of the past few years are paying off… we are lowering our costs where this does not affect the customer, and are simultaneously further investing in our product and service quality,” chief executive Carsten Spohr said in a statement.
The annual report did pose some warnings for the year ahead, though. “Competition is becoming more intense.” And while a number of carriers have folded, there has been “an even greater number of entries.” The airline will, therefore, experience “significant fluctuations” in 2018.
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