Lufthansa earnings fall in third quarter

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Lufthansa’s operating profit fell 12.4% in the third quarter, to €589 million ($807 million), while the German airline group’s revenues remained stable at around €8.7 billion.

Net profit decreased just over 30% to €451 million.

Turnover at Lufthansa’s passenger arm – including low-cost subsidiary Germanwings – rose 1.3% to €4.9 billion, and operating profit increased 3.2% to €391 million.

For wholly owned subsidiary Swiss International Air Lines, revenues declined 1.5% to €1.14 billion, while operating profit was stable at €119 million.

Meanwhile, Austrian Airlines’ turnover fell 3.1% to €600 million, but operating profit climbed almost 15% to €54 million.

Lufthansa Cargo’s business declined 10.7% to €583 million, and the €19 million operating profit of 2012's third quarter 2012 turned into an €18 million loss.

Over the first nine months of 2013, the group’s total operating profit fell more than 27% to €661 million. Revenues, again, were stable at around €22.8 billion.

However, Lufthansa says that when costs for its Score efficiency programme and 2012's "positive one-off effects" are taken into consideration, nine-month operating profit grew from €582 million to €859 million.

Lufthansa’s European traffic has returned to profitability for the first time in five years, says chief executive Christoph Franz. Capacity was cut back, and in July the airline transferred all narrowbody routes outside the Frankfurt and Munich hubs to Germanwings.

The Score programme had "clear effects", says Lufthansa. Costs were slashed by €171 million, or 0.9%, across all divisions, if one-off effects and lower fuel costs – due to fewer flights – are excluded.

Lufthansa’s passenger arm and Germanwings almost tripled their combined operating profit, from €111 million to €300 million, during the first nine months, while revenues grew 0.8% to €13.2 billion.

Swiss grew its earnings 5.2% to €182 million, as turnover held firm at €3.2 billion.

However, Austrian’s operating result fell to €19 million from €210 million in 2012. Last year's figure was boosted by one-off effects due to the operations transfer to regional subsidiary Tyrolean Airways. Revenue decreased 4.3% to €1.6 billion.

Lufthansa Cargo’s revenues fell just over 10% to €1.8 billion, while its operating profit dropped almost 36% to €43 million.

Meanwhile, Lufthansa Technik boosted its contribution to the group result as the MRO unit's operating profit increased nearly 44% to €332 million. The division's revenues grew 3.6% to $3.1 billion.

The group’s total operating cash-flow rose 23.6% to €3 billion.

For the full year, Lufthansa expects to generate an operating profit of €600-700 million. In 2012, the group's earnings came in at €524 million.