German air carrier Lufthansa AG (LHA.DE) saw its shares fall on Thursday as it announced it was facing a major cash loss in its Q3 report.
Shares fell by at least 1.2% in early trading on Thursday.
It reported a loss of €1.3bn (£1.19bn) in adjusted earnings before interest and taxes (EBIT) in the third quarter, compared to a profit of €1.3bn in the same period a year ago, highlighting that the global coronavirus pandemic continued to have a “considerable impact” on its earnings. This was largely due to customer reimbursements of ticket costs for coronavirus-related flight cancellations, which amounted to €2bn.
“Strict cost savings and the expansion of our flight program enabled us to significantly reduce the operating cash drain in the third quarter, compared to the previous quarter,” Carsten Spohr, CEO of Deutsche Lufthansa AG said in a statement of Thursday.
The company wants “to return to a positive operating cash flow in the course of the coming year” and plans on doing so by advancing restructuring programs throughout the business that will make it “more efficient in all areas.”
It also said it needs to double operations from current levels to stem the losses, signalling the wider issues the airline industry faces as more countries introduce COVID-19 lockdowns. As a result, the business will adjust its original planning and offer a maximum of 25% of last year’s capacity from October to December as it braces for weaker air travel demand in the winter.
The UK, for instance, begins a one-month lockdown on Thursday.
“We are now at the beginning of a winter that will be hard and challenging for our industry,” said Sphor. “We are determined to use the inevitable restructuring to further expand our relative competitive advantage. We aspire to remain the leading European airline group following the end of the crisis.”
The UK airline industry as a whole has also seen its worst third quarter on record, as the confidence in travel continues to be knocked by the COVID-19 pandemic.
There were no new orders for aircraft in September, and only 13 orders placed during the entire financial quarter, according to ADS, the UK trade organisation representing businesses across the aerospace industry.
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