LONDON – Europe’s major airlines including Lufthansa and Air France-KLM are expected to report another quarter dragged down by rising costs and limited planes, with no sign of delivery delays from planemakers Boeing and Airbus improving any time soon.
While demand has remained stable, costs for maintenance, adverse weather, air traffic control issues and disruption in the Middle East have continued to weigh on carriers.
Delays of new plane deliveries are the biggest ongoing headache, though, forcing airlines to fly older models that are more expensive to maintain and use more jet fuel and cut traffic estimates.
Lufthansa (LHAG.DE), opens new tab Chief Executive Carsten Spohr warned the airline is now expecting a five-year delay on its Boeing (BA.N), opens new tab 777X deliveries.
“We don’t expect to get them until 2026. And we need them,” he told journalists earlier this month.
The German carrier is expected to report on Tuesday a third-quarter operating profit of 1.3 billion euros ($1.4 billion), down 9% from a year ago and a margin of 12.1%, according to a company-led analyst poll.
The airline is losing up to $550,000 per flight on its route from Frankfurt to Beijing as a result of flying older jets with few passengers, according to a Bloomberg report, as it struggles with competition from Chinese carriers who still fly over Russian airspace.
“European airlines are in an extremely unequal competitive position with China, as well as with airlines from the Persian Gulf and Bosporus,” a Lufthansa spokesperson told Reuters in an emailed statement.
“All airlines from these countries benefit from low location costs, different social standards and high government investment in the aviation sector.”
British Airways, owned by IAG (ICAG.L), opens new tab, has said it will cancel more long-haul flights due to delivery delays from engine maker Rolls-Royce.
Discussion about this post