German airline group Deutsche Lufthansa has slashed its 2024 earnings guidance, citing low yields in Asia and operational problems at home. The company now expects adjusted 2024 earnings before interest and taxes between €1.4 billion and €1.8 billion, down from a previous target of around €2.2 billion.
Lufthansa attributes the lowered forecast to a market-related decline in yields across all traffic regions, particularly in Asia. The company also acknowledges inefficiencies in the flight operations of its core Lufthansa brand and regional carrier Cityline. Delayed aircraft deliveries are further hindering operations.
To address these challenges, Lufthansa is launching a comprehensive turnaround program. This program aims to improve efficiency and address the operational issues affecting the company. The second-quarter results also highlight the severity of the financial strain, with adjusted EBIT falling by more than a third to €686 million.
The revised profit forecast and the announcement of the turnaround program signal the significant challenges Lufthansa faces. The airline group is grappling with a combination of external market factors and internal operational problems, which are impacting profitability.