Image via WikipediaDeutsche Lufthansa AG warned that persisting economic uncertainty is clouding the growth prospects of the aviation industry, but added it doesn't expect the global economy to drift into a renewed recession.
"None of our data suggests there will be a double-dip recession scenario, but the going definitely gets tougher," Chief Financial Officer Stephan Gemkow told a news conference.
The increasingly uncertain economic outlook was already reflected in the company's falling third-quarter profits – although the decline was lower than analysts had expected – and is continuing to depress future bookings, the German flagship airline said.
Previously, Lufthansa had been relatively unaffected by the economic crisis that is gripping the euro zone, but business confidence in Germany and elsewhere in Europe has shown signs of wavering amid concerns that a slowdown may be around the corner.
Still, Lufthansa also reiterated its recently lowered full-year profit guidance, and said it would "initially prepare for slower growth rates in passenger and freight traffic."
In response to the deteriorating economy, Lufthansa pledged to divest loss-making units – such as British Midland Airways, known as bmi – step up cost cutting efforts, adjust passenger capacity expansion plans and boost its low-cost airline offerings.
"The macroeconomic environment--and therefore the strength of demand for the airborne companies in particular – has weakened significantly," Lufthansa said in its third quarter report. "At the same time, the booking prospects for the months ahead have deteriorated substantially," the carrier said.
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