Deutsche Lufthansa AG said its main passenger unit as well as the Austrian subsidiary and its catering business will help operating profit rise this year.
Earnings before interest and taxes, adjusted for book gains or losses on disposals, extraordinary appreciation or depreciation and non-recurring pension-fund transactions will rise to more than 1.5 billion euros ($1.58 billion) from 1.2 billion euros in 2014, the company today said. The new measure is being introduced to better compare Europe’s second-largest carrier with rivals, the Cologne-based airline said.
Lufthansa remains locked in a conflict with pilots over retirement benefits that led to 10 strikes last year, while competition from low-cost airlines and Persian Gulf rivals depressed fares in Europe, prompting Chief Executive Officer Carsten Spohr to cut financial targets twice in his first year as CEO. To better compete in Europe, Lufthansa is moving much of its traffic to Eurowings, a new unit it claims can operate 40 percent cheaper.
“Given the results that we achieved in our core business, we can no longer regard sticking to inherited uneconomic structures as an option for the future,” Spohr said in the statement. “The competitive pressures on our airline will only further increase.”