Deutsche Lufthansa AG (LHA) said second- quarter profit jumped almost 28 percent, beating estimates, as Europe’s second-biggest airline scrapped its weakest routes and introduced a 1.5 billion-euro ($1.8 billion) efficiency program.
Operating profit rose to 361 million euros from 283 million euros a year earlier, Cologne, Germany-based Lufthansa said in a statement today. Analysts had anticipated a 226 million-euro profit, based on five estimates in a Bloomberg survey.
“These are good numbers that reflect a solid cost-driven performance and better capacity restraint,” said Stephen Furlong, an analyst at Davy Holdings in Dublin with an “outperform” rating on Lufthansa. “It’s nothing stellar though and we’re still early on in the restructuring process.
Lufthansa has frozen capacity, terminated routes and begun a merger of administrative activities at its short-haul and Germanwings units in a drive to slash expenses. Chief Executive Officer Christoph Franz, who sold unprofitable U.K. unit BMI in the quarter, is still predicting a full-year operating profit in the “mid three-digit million euro range.” That’s before restructuring costs of 100 million euros to 200 million euros.
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