LONDON/FRANKFURT (Reuters) – Lufthansa warned on Thursday that its first-quarter operating loss would widen and gave a moderate outlook for 2024, as the group faces pressure from German unions over wage issues.
“In the first quarter, the adjusted loss before interest and taxes (Ebit) is expected to be higher than the previous year, due to the impact of strikes on results and a decline in profit in the Logistics division,” indicates the group in a press release.
On the Frankfurt Stock Exchange, Lufthansa shares fell 1.29% to 6.98 euros at 08:58 GMT.
German unions have been pushing for better wages and working conditions for months to cope with falling purchasing power.
Thousands of employees in the German rail and air transport sector went on strike on Thursday.
Lufthansa, in particular, agreed to new, higher pay deals to end strikes, which analysts say threatens its 2024 operating margin target.
The group, however, still continues to aim for an adjusted Ebit margin of at least 8% in 2024.
Lufthansa’s operating profit recorded a jump of 76% year-on-year in 2023, to 2.7 billion euros. The turnover stood at 35.4 billion euros, an increase of almost 15% which however remains below the expectations of analysts, who expected on average 36.3 billion euros, according to a consensus compiled by the group.
(Reporting Joanna Plucinska; Dimitri Rhodes; editing by Kate Entringer)
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