Lufthansa to keep the brakes on growth in fourth quarter

Lufthans’s planned total growth to this year has shifted to 5.2 per cent from 5.4 per cent. Kai Pfaffenbach / Reuters

Lufthansa said it would slow planned growth further in the fourth quarter to try to offset pressure on ticket prices but was looking forward with confidence to next year.

Germany’s biggest airline had already pre-released third-quarter results and given a more positive profit target for the year two weeks ago after business bookings proved better than expected in September.

After a period helped by low fuel prices and bumper travel demand, analysts are concerned that tough times are coming for airlines, especially with security concerns dampening demand and as low-cost carriers put more seats on to the market to try and take advantage of low fuel prices and gain market share.

“We are responding to the pricing pressures in the air transport sector with consistent capacity and cost discipline,” chief executive Carsten Spohr said.

Lufthansa said on Wednesday it now expected capacity growth of 8.7 per cent in the fourth quarter, taking a further 1 percentage point off previous plans. That takes its total growth for 2016 to 5.2 per cent, from a previous 5.4 per cent.

The British Airways owner IAG said last week its 2016 capacity growth was now 4.4 per cent, about 1 percentage point below what it initially planned for, and that it was preparing for lower growth than expected into 2017.

Providing a further headache for Lufthansa is plans by low-cost rival Ryanair to start flying from its main base in Frankfurt, with an announcement expected later on Wednesday.

* Reuters

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