Europe’s Big 2 - Lufthansa and Ryanair Under Pressure
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July 30, 2019 - by RICHARD SCHUURMAN for airinsight.com
Overcapacity and pressure on fares and yields in Europe are hurting the continent's two biggest airlines. After Ryanair blamed excessive capacity at below cost prices for its 21 percent drop in profit in HY1 (to EUR 243 million) on July 29, today Lufthansa Group disclosed a significant weakening of its financial results for Q2 and HY1.
Ryanair's Michael O'Leary specifically blamed the weak market in Germany and the UK for his lower results, despite an 11 percent increase in passenger numbers to 41 million and identical increase in revenues to EUR 2.31 billion. In Germany, Lufthansa and Eurowings are in neck-and-throat competition with the rest.
Lufthansa's CFO Ulrik Svensson voiced similar concerns on July 30, saying: "Our earnings are feeling the effects of tough competition in Europe and sizeable overcapacities, especially on our short-haul routes out of Germany and Austria." This particularly affects Dusseldorf, Berlin and Frankfurt.
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