By Mauro Orru
Shares of Deutsche Lufthansa plunged Thursday due to higher inflation-driven costs and limited capacity this year due to air-traffic control staff shortages and supply-chain snags, even though the German carrier group reported profit above analysts’ forecasts for the second quarter.
At 0800 GMT, Lufthansa shares traded 7% lower at EUR8.21.
Lufthansa said its expenses had increased, particularly for air traffic control and airport charges as well as for maintenance and spare parts, echoing recent comments from Franco-Dutch carrier group Air France-KLM, that also cited the impact of higher salaries.
“The market didn’t like the higher non-fuel unit cost guide from Air France-KLM last week, so there’s a risk of the same here,” Deutsche Bank analysts wrote in a note to clients.
Airlines have also had to contend with supply-chain snags that make it harder to procure spare parts and quickly deploy aircraft where needed.
Bottlenecks in the European air traffic system will weigh on capacity for the year, which the group now expects will be around 85% compared with 2019, as opposed to a previous forecast of roughly 85% to 90%.
High demand, especially in premium cabins, led to a 13% increase in yields for the German carrier group’s passenger airlines compared with the previous year, with a load factor–a measure of seats sold–at 83%, the same as in 2019. However, higher expenses offset the better yields, Citi analysts said.
Write to Mauro Orru at [email protected]; @MauroOrru94
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