Lufthansa Cuts Profit Goal, Cites Global Crisis

Deutsche Lufthansa cut its full-year operating profit target on Tuesday, citing high fuel prices and the impact of the global financial crisis.

The German flagship airline said it now expected operating profit of about 1.1 billion euros ($1.38 billion) compared with a previous estimate of around last year's level of 1.38 billion.

The news hit Lufthansa's share price, which closed 8.7 percent lower at 9.43 euros, while the German blue-chip DAX index was up 11.3 percent.

Sluggish consumer spending has chipped away airlines' profitability, although easing oil prices promise to take pressure off their massive fuel bills.

Rivals Air France-KLM and Austrian Airlines have both issued profit warning in the past two weeks.

In the first nine months of this year, Lufthansa's revenue grew 13.6 percent from a year earlier, but surging fuel costs pushed down operating profit by 9.3 percent to 984 million euros.

Nine-month net profit fell to 551 million euros from last year's 1.6 billion, which had been boosted by book gains from asset sales and a one-off tax effect.

Lufthansa is due to publish full nine-month and third-quarter results on Wednesday.

Lufthansa's stock trades at about 7.9 times estimated 2009 earnings, at a premium to rivals Air France-KLM and British Airways as investors hope the company's cash will help carry it through the crisis.

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