Lufthansa said Tuesday that its Q2 net profit dropped sharply due to intense price competition on short-haul routes, and confirmed previous cuts to its 2019 guidance. Net profit at the carrier was E226m (US$251.8m) compared with E752m in the same period the year prior, while revenue rose 4% to E9.63b, the company said. Adjusted earnings before interest and taxes fell 25% to E754m. The company’s adjusted free cash flow came in at E91m. “Persistent overcapacities, aggressive competition and increasingly price-sensitive demand continue to pressure yields on the European routes of Network Airlines and Eurowings, particularly in the German and Austrian home markets,” Lufthansa said. Eurowings suffered substantial declines on short and medium-haul routes during the first half of the year, the company said. <br/>
star
Air Canada has removed the Boeing 737 Max from its schedule until January pending regulatory approvals, joining Southwest Airlines in scrapping plans for flights of the jetliner into 2020. The carrier said the grounded jets will reduce capacity and curb earnings growth in Q3, even as the company posted profit that beat analysts’ estimates for the second quarter. “The impact of the Boeing 737 Max grounding will be felt more acutely in our very busy summer period,” Calin Rovinescu, president and CE said Tuesday. The removal of Boeing 737 Max until at least Jan 8 “reflects our prudent approach to scheduling, giving customers certainty when booking their fall and especially their winter holiday travel.” The airline said that Q3 projected capacity is expected to fall about 2% compared with the same period in 2018. <br/>
Profits at Air Canada beat expectations in Q2 thanks to higher travel volumes and rising business class income, the airline said Tuesday. The positive earnings came despite the grounding of the company’s fleet of 24 Boeing 737 MAX aircraft. The airline posted net income of C$343m (US$260.4m) for Q2, the company said. That was up from a loss of $102m in the same period a year ago. Adjusted earnings amounted $0.88 per share, higher than the $0.75 analysts had been expecting. Air Canada reported a 3.6% increase in traffic and 10.2% increase in revenues from the business cabin. Q2 revenues were $4.8b, up from $4.3b in the same period last year. Calin Rovinescu, the airline’s president and CE, said the 737 MAX crisis had hit year-over-year pre-tax earnings growth, even though it had surpassed expectations. <br/>
Asiana Airlines said Tuesday it plans to switch to smaller planes for some of its Japan routes starting September due to declining demand amid a worsening diplomatic and economic row between South Korea and Japan. The carrier does not currently have plans to discontinue any routes to Japan, but it is monitoring the situation, a spokesman at the airline said. Asiana said it will fly smaller aircraft for 3 routes to Japan's Osaka, Fukuoka and Okinawa departing from Seoul. Last month, Japan tightened controls of exports of high-tech materials to South Korea, in apparent retaliation for a South Korean court ruling over wartime forced labour. The ill-feeling has led to a widespread boycott of Japanese products and services, including air travel. <br/>
ANA saw its Q1 net profit decline 29% to JPY11.4b (US$104.9m), compared to JPY16.1b in the year-ago period, partly as a result of higher costs as the airline prepares for a growth phase in 2020. ANA Holdings said net profit for the quarter ending June 30 was “generally in line” with its outlook released in April. As a result, the company has not changed its forecast of a JPY108b net profit for the full fiscal year. Consolidated quarterly revenue rose 3.2% year-over-year to JPY500.5b. However, costs were up 4.2% to JPY484.3b, resulting in operating profit falling 19.4% to JPY16.1b. In the air transportation segment, revenue increased 3.1% to JPY439.7b, the result of higher demand during this year’s extended Golden Week holiday period, and generally strong performance of domestic and international passenger services. <br/>