The Lufthansa Group is forecasting a "significantly weaker" performance than expected this year due to declining demand.
"The terrorist attacks in Europe and also the
increasing political and economic uncertainties are having a tangible impact on
passenger volumes," Lufthansa Group CEO and chairman Carsten Spohr said in
a statement. "The forward bookings, in particular for our long-haul
services to Europe, have declined significantly. We expect the high pricing
pressure to continue."
Lufthansa noted a high cancellation rate among travel group
bookings from China and other Asian nations to the European Union as well as an
impact from the U.S. State Department's travel alert for Europe effective
through this month. Additionally, Lufthansa is seeing overcapacity on routes
between Europe and Asia following "aggressive expansion" of Middle
Eastern carriers.
The Brexit vote, meanwhile, "caused great uncertainty
on the global markets," but "further developments and the impact on
the airline industry will depend on the outcome of the European Union's
negotiations with the [United Kingdom,] which have not yet begun,"
according to the Lufthansa Group.
The group's traffic revenue declined 4.9 percent year over
year to €6.4
billion during the second quarter amid a 1.1 percent drop in traffic. Capacity
was up 2.2 percent year over year, and passenger load factor declined 2.6
percentage points to 77.7 percent. Yield declined 2.7 percent.
The Lufthansa Group reported a net profit of €437
million for the quarter, down from €529 million in the second quarter of
2015.